HBWnovel Chapter 338 Audit Team Enters Osaka
Chapter 338 Audit Team Enters Osaka
October 28, 1990. Monday.
Osaka. Yodoyabashi.
It was 9:03 a.m. When Endo got out of the car, there was a faint fishy smell of river water in the air.
The surface of the Dojima River was hazy and gray. On the opposite bank, the row of ginkgo trees on Nakanoshima Island had turned half yellow, and the leaves were blown by the wind and stuck to the paving stones of the sidewalk.
He was wearing a black three-piece suit today, but no overcoat.
Even though the mornings in Osaka at the end of October were already chilly at twelve degrees Celsius, wearing a coat would still give the impression that he was "intending to sit for a long time"—he didn't want to give the other person that impression.
Four people followed behind him.
The audit director of SIS, Tadokoro, the head of the legal department, Nagai, and two technical document clerks.
Each person carried a hard-shell briefcase. The briefcases were silver-gray, with the letters "SA" subtly printed on the locks.
Endo's gaze fell on the seven-story building in front of him.
The exterior walls are covered with beige tiles, and a bronze sign hangs on the top floor. The font is still the Kakugoshik typeface (sans-serif typeface, equivalent to standard Chinese sans-serif typeface) popular in the Showa 40s.
Itoman Shoji Co., Ltd. Osaka Headquarters.
"Mr. Endo."
The sound came from the right.
Kawase Masahiro stood under the side porch, his grey kimono jacket now replaced by a dark navy blue suit. A small metal clasp, the emblem of the Sumitomo family, adorned his chest—a diamond shape with a grid pattern.
Endo gave a slight bow. "Mr. Kawase, I apologize for keeping you waiting."
"I wouldn't dare." Kawase stepped aside to let him pass. "Everything is ready inside. The air conditioning and power supply in the conference room on the third floor have been checked."
Endo didn't leave immediately. He took a folded document from his briefcase and handed it to Kawase.
"Letter of authorization, please confirm."
Kawase took it and unfolded it.
The paper bears the private seal of the Sumitomo family—authorized in the name of Sumitomo Yoshio personally.
The authorization content was written with great care:
"Entrusted by Sumitomo Corporation, we assisted in verifying the trade settlements, warehouse receipt financing, overseas accounts receivable, and transactions between Sumitomo Corporation and its affiliated companies and the company's asset management account."
Kawase read it word by word, his gaze lingering a little longer on the words "family asset management account".
He then folded the document and put it into the inner bag.
"Confirmed, please proceed."
……
Third-floor conference room.
The space is 20 square meters. The long table, eight chairs, and the photocopier in the corner were moved in temporarily yesterday and are still sealed with plastic tape.
The curtains were half-drawn, and you could see the side of the Sumitomo Bank Osaka Main Store next door.
Endo placed the briefcase on the table and unlocked it.
"Tashiro."
"exist."
"The list will proceed in the order it was last night. First, go through the contract ledger of the trade settlement department, then the number sequence of the warehouse receipt financing."
Tadokoro nodded and pulled a printed document catalog from his box. It was three pages long, A4 size, with each row listing the name, number range, and corresponding department of the documents to be retrieved.
Endo glanced at the time. 9:18.
"Have Ito Man's men arrived yet?"
Kawase was speaking quietly to a middle-aged man in uniform in the hallway. Hearing Endo's question, he turned around.
"The deputy director of the Trade Management Department will be here soon. The General Affairs Section is currently preparing the first batch of documents."
"How many?"
"They said they would provide the annual contract ledger from April 1989 to March 1990 today."
Endo placed his fingertips on the table and tapped it lightly.
"Only ledgers? Where are the original contracts?"
Kawase's expression didn't change, but his answer was a beat late.
"The original contract... they said they need to retrieve it from the archives, and it won't be ready until tomorrow."
Endo's lips twitched slightly. The movement was minimal.
"Alright, let's look at the ledgers first."
He didn't ask any further questions.
……
At 9:45, Mitamura, the deputy head of the Ito Man Trade Management Department, entered the conference room, followed by a young employee carrying a cardboard box.
Mitamura was in his early fifties, with his hair combed back and slicked back. He had high cheekbones and often habitually pressed his fingers against his temples when he spoke.
The first thing he noticed when he saw Endo was the name tag on his chest—"SAHoldings".
"Mr. Endo, it's a pleasure to meet you." He immediately stopped and gave a standard 45-degree bow. "Mitamura, Trading Management Department, Ito Man Trading Co., Ltd."
Endo stood up to return the greeting, but at a shallower angle (about ten degrees).
"Thank you for your hard work. Time is precious, let's get started."
The cardboard box was opened. Inside were four thick binders, each about three hundred pages long. The covers had annual labels.
Tadokoro took it and opened the first book.
Ten minutes later.
"Mr. Endo," Tadokoro said in a low voice.
Endo walked over and looked down at the line that Tadokoro's finger was pressing.
That was a "prepayment for steel imports" in July 1989.
The amount is 230 million yen. The recipient of the payment is a company called "Hanwa Metal Trading".
Tadokoro turned to the next page.
In September of the same year, another stroke of the pen.
"Prepayment for steel imports", 180 million yen, payee: "Hanwa Metal Trading".
Turning the page again. November. 150 million yen. Same company.
Tadokoro marked the three pages with yellow sticky notes, then looked up at Endo. Endo's expression remained unchanged.
"What about warehousing?"
Tian shook his head.
"The ledger only has payment records; the corresponding inventory entry columns are all blank."
Endo's gaze shifted to Mitamura. Mitamura sat opposite him, flipping through another document, seemingly unaware of what was happening.
Endo did not ask in person.
He wrote a word in pencil on the yellow sticky note in the field.
"check."
……
1:15 PM.
During lunch break, Mitamura and his staff left the meeting room, saying they were going to the cafeteria on the first floor for lunch.
After the door closed, Endo immediately had someone pull the Venetian blinds in the conference room all the way down.
Four people sat around a long table.
Tadokoro laid out the findings from the morning.
"To date, I have found eleven similar 'prepayments' in the ledger."
"And none of them have corresponding inbound records."
"The payments were mainly made to three companies."
He wrote three names on the whiteboard:
Hanwa Metal Trading.
Bubble and real estate development.
Osaka Commercial Building Materials.
Endo looked at the whiteboard.
Have you checked the business registration information for these three companies?
Nagai opened his notebook.
"Hanwa Metal Trading Co., Ltd., registered address in Tatekibori, Nishi-ku. Capital of 10 million yen. Registered business: wholesale of metal products."
Representative Director: Masaki Takagi
Endo remembered the name.
"Were there any real estate transaction records during the bubble period?"
Nagai traced a line on the notebook with his finger.
"have."
"In October 1988, we purchased an industrial land plot in Higashi-Osaka City from Sumitomo Trust."
"In March 1989, the land was transferred to 'Nakanoshima Comprehensive Development'. The price difference was approximately 700 million yen."
Endo's gaze lingered for two seconds.
A "metal wholesaler" with a registered capital of 10 million yen made a land transaction with a price difference of 700 million yen within a year.
"The second one. 'Paohe Real Estate Development'."
Nagai turned to the next page.
"The registered address is in Kitahama, Chuo-ku. The registered capital is five million yen."
"--The registration date was June 1988."
It was dissolved in 1989.
Endo closed his eyes, then opened them again.
"One-year company."
"Yes."
"The third one."
"'Osaka Commercial Building Materials'. Registered address..." Nagai paused for a moment. "Same as 'Hawa Real Estate Development'. 1-3-12 Kitahama, Chuo-ku."
There was a three-second silence in the conference room.
Two companies at the same registered address.
One company has been deregistered, while the other is still operating.
Endo withdrew his hands from the table, interlaced his fingers, and rested them on his knees.
"Warehouse receipt," he said.
Tadokoro immediately pulled out another stack of documents. It was the warehouse receipt financing ledger that he had just received from the general affairs department that afternoon.
"There's a problem with the numbering sequence," Tadokoro stated directly. "The warehouse receipt numbers for 1989 should normally be from WH-8901 to WH-8947, a total of forty-seven receipts."
"But there are only forty-two in the actual ledger."
"I skipped five numbers."
He circled the five missing numbers with a red pen.
WH-8912。WH-8919。WH-8923。WH-8931。WH-8944。
Endo looked at the five red circles.
Where did the margin go?
Tadokoro pulled out a photocopy from the appendix of the ledger.
The document shows Ito Man's bank transfer record—the payer is "Ito Man Trading Osaka Headquarters," and the payee is an account number.
The account holder's name field reads: Sumitomo Bank Osaka Main Store Third Trust Account.
"The margin was deposited into a custodian account at Sumitomo Bank," Tian said. "The amount matches the collateral ratio for warehouse receipt financing—30% of the face value."
"But the problem is—"
He turned to the next page.
"Ito Man does not have copies of the letters of credit corresponding to these five deposits."
Endo's fingers stopped on his knee.
"Have you confirmed it?"
"It's confirmed. I asked Mitamura twice. He said, 'The original is with the bank; we need to obtain a copy from the bank.'"
Endo did not speak.
He looked out the window—through the gap in the blinds, he could see the gray wall of the Sumitomo Bank Osaka Main Store next door.
……
After work resumed in the afternoon, the atmosphere in the meeting room became more somber than in the morning.
The field is located in the warehouse ledger.
Endo stood by the window, the Venetian blinds leaving only a slit a finger's width wide. His gaze passed through that slit and landed on the third floor of the Sumitomo Bank Osaka Main Store across the street.
The curtains in that window moved.
It was very light; it seemed as if someone used their fingers to pry open a corner, looked at it for a few seconds, and then put it down.
Endo did not move.
At 2:40, footsteps could be heard in the corridor.
The footsteps stopped at the door.
It paused for almost ten seconds.
Then he left.
Tadokoro looked up at Endo. Endo shook his head slightly.
It's exactly three o'clock.
Those hard-soled shoes came back, this time without hesitation.
After two knocks, the door was pushed open from the outside.
A person walked in.
He was around fifty years old, of medium build, and his dark gray suit was two levels better tailored than Mitamura's.
His heels tapped twice crisply on the floor before he stood still in front of the table.
A business card was handed over.
Sumitomo Bank Osaka Head Office. Financial Services Department. Deputy Manager.
Endo took the business card, looked at it for two seconds, and placed it on the table.
"Mr. Umeba, please have a seat."
There were no seats in the plum blossom field.
He stood with his hands behind his back, his gaze sweeping over the people in the conference room and the documents spread out on the table.
His lips twitched slightly, as if he had smelled something unpleasant.
Then he spoke.
"Mr. Endo, I am here as a representative of the creditor."
Endo remained seated, looking up at him slightly.
"There are a few things we need to confirm beforehand."
Mei Chang pulled a piece of paper out of the inner bag.
"First, internal bank documents, including loan review records, credit review opinions, and customer rating reports, are all considered bank trade secrets."
"Disclosure to external organizations is prohibited without the written consent of the Head Office Compliance Department."
He read the second line of the paper aloud.
"Second, client files must not be copied. Any client information, whether in paper or electronic form, may only be viewed on-site by the external audit team and must not be taken out."
Article 3.
"Third. Credit approval documents are part of the bank's internal decision-making process and are not subject to external verification."
Article 4.
Fourth, banks only accept official account reconciliation statements.
"The reconciliation letter must be signed and stamped by the other party's financial officer and delivered through postal channels. Verbal or telephone inquiries from external auditors will not be accepted."
Mei Chang deftly put the paper back into his inner bag.
"The above four points represent the unified stance of the Head Office Compliance Department. Please take note."
The meeting room was quiet.
Tadokoro's pen froze in mid-air. Nagai looked down at his notebook.
The two technical document clerks exchanged a glance, then quickly looked away.
Endo did not move.
He leaned back in his chair, his hands resting on the armrests, looking at the plum blossom field.
three seconds.
Five seconds.
Then he smiled. It was a very slight smile, just a millimeter upturn at the corner of his mouth.
"Mr. Umeba."
"Um."
"I understand everything you've said."
Endo's tone was flat, which had a bit of the essence of Satsuki's.
"Banks have their own rules. We respect that."
Mei Chang's shoulders relaxed slightly.
Endo stood up.
He walked to the whiteboard and pulled down the cover that was obscuring it—there was nothing written on it; Tadokoro had already wiped the red-circled side clean five minutes earlier.
"However, today we'll only look at Ito Man's own account."
Endo turned around and looked at Umeba.
"The trade contract belongs to Ito Man."
"The warehouse receipt belongs to Ito Man."
"The invoice is from Ito Man."
"The bill of lading is also from Ito Man."
"The deposit payment voucher—the money that was transferred out also came from Ito Man's account."
He paused for a moment.
"These things have nothing to do with internal bank documents, right?"
Mei Chang narrowed his eyes slightly.
"...Of course. Ito Man's own trade documents are indeed not within our restrictions."
"That's good."
Endo returned to the chair, but did not sit down.
He reached out and picked up the copy of the deposit payment voucher, which bore the inscription "Sumitomo Bank Osaka Main Store - Third Custodian Account," from the table, and held it up to a height that Umeba could see.
"Mr. Umeba, there's one more small question I'd like to confirm."
Mei Chang's gaze fell on the paper, and his pupils contracted by less than half a millimeter.
"This deposit was paid by Ito Man to your bank's escrow account."
"The amount, date, and account name are all on Ito Man's own bank transfer records."
Endo put the paper back on the table.
"I'm just curious—Ito Man paid a deposit, so he should have received a copy of the corresponding letter of credit."
"But they don't have that here."
He looked up.
"Does Mr. Umeba know why this is?"
Mei Chang's Adam's apple bobbed slightly.
There was a two-second silence.
"You should ask Ito Man's finance department about this." His voice was a notch firmer than before. "The bank is only responsible for custody; it's not responsible for explaining why the customer didn't keep their copy safe."
Endo nodded. "You're right."
"Careless customers are such a headache... right?"
He didn't ask any further questions.
"Then we won't bother Mr. Umeba any longer. If there are any formal reconciliation matters later, we will use postal channels."
Umeba glanced at him. Their eyes met in the air for less than a second.
Then Mei Chang turned around, tapped her heels twice on the floor, the door was opened and then closed again.
The footsteps faded away down the corridor.
……
After the door closed, no one spoke in the conference room.
Tadokoro was the first to break the silence.
"He arrived very quickly."
Endo put the deposit receipt back into the folder.
"Mitamura made the phone call when he went out for lunch."
Tadokoro stopped.
Endo pulled out a chair and sat down, then tightened the loose cufflink above his shirt sleeve.
"Don't worry about it. It's better to let him come than not to."
Nagai turned over the business card left by Umeba and glanced at it. The back was blank.
"Mr. Endo, what's the next step?"
Endo leaned back in his chair. His gaze fell on the four binders, the five red-circled warehouse receipt numbers, and the names of the three shell companies on the table.
"Keep going."
His fingers tapped lightly on the armrest.
"Once the original contracts arrive tomorrow, we will focus on comparing the signatories, descriptions of goods, and delivery terms for those eleven prepayments."
"At the same time—" he looked at the technical clerk. "Make a summary table of all the sources of Ito Man's 'trade payments.' Categorize them by company name, and indicate the amount and date."
"Yes."
Endo stood up and walked to the window.
Through the gaps in the Venetian blinds, the gray wall of the Sumitomo Bank Osaka headquarters stood quietly in the afternoon sunlight.
Endo didn't look for long. He turned back and said his last words to Taka.
"It doesn't matter if the bank doesn't provide the original receipt."
He put his hands in his suit pockets and raised his chin slightly.
"Ito Man has already exposed them by revealing his own account."
Tadokoro looked down at the few margin payment vouchers on the table that did not have copies of the letters of credit.
The five deposits totaled over 400 million yen.
The money went into the bank's escrow account, but the copy of the letter of credit disappeared without a trace.
Either the letter of credit was never opened, and the deposit was replaced with something else.
Either a letter of credit is issued, but the funds do not flow into any real trade—the letter of credit itself is just a piece of paper, only used to make the margin legitimately flow from Itoman into the banking system.
In either case.
The answer is already written in front of us.
Endo looked at the receipts, his finger pausing for a moment at the edge of the folder.
"What was actually deleted wasn't in the bank account."
His voice was very soft.
"It's in an attachment that Ito Man thought no one would see."
Outside the window, the surface of the Dojima River was ruffled by the wind.
The gray ripples spread out in layers, crashing against the stone embankment on the opposite bank and breaking into fine dust.
In Osaka, it starts to get dark before four o'clock.
The fluorescent lights in the conference room hummed. Endo pulled the blinds all the way shut and turned to face the team.
"Work overtime tonight. Before 7 PM, compile all confirmed anomalies into a memo."
"Send the fax back to Tokyo headquarters."
He glanced at the clock on the wall.
"The young lady is waiting."