Tuesday, November 13, 1990.
Kitahama, Osaka.
The floor where the Sumitomo Bank Osaka Main Branch's Financing Department was located was quieter than usual.
At 9:17 AM, when the fax machine let out its first low hum, the young staff member in the Financing Department did not immediately realize what that sheet of thermal paper would bring.
He simply did what he always did—set aside the credit review application folder he had just organized, and reached out to tear off the fax.
The header at the top of the paper was very neat.
[Sumitomo Main Family Legal Department]
The young staff member's fingers paused.
He instinctively looked at the top right corner of the fax, where there was only a very short note.
[The original has been delivered by courier to the Tokyo Head Office Legal Department. Copies have been CC'd to the secretariats of Sumitomo Chemical, Sumitomo Metal, and Sumitomo Electric.]
The young staff member's Adam's apple bobbed slightly.
Not daring to look any further, he immediately took the fax and walked quickly toward the executive director's office.
Three minutes later, there was a knock on the door of Yasui's office.
"Come in."
The young staff member pushed the door open and handed over the fax with both hands.
"Executive Director, a formal note from the Main Family's Legal Department."
Yasui was originally flipping through an extension schedule for Itoman Trading.
Hearing the words "Main Family's Legal Department," his brow furrowed imperceptibly.
He reached out and took the fax.
The first page was very short.
The wording was restrained, the format rigorous, and the tone calm—it could even be said to carry the usual dignity of the old Sumitomo family.
But Yasui had only read the first three lines before his fingers froze on the edge of the paper.
[The Sumitomo Main Family Legal Department, in its capacity as the jointly authorized representative of the Sumitomo-affiliated industrial enterprises, hereby issues a formal note to your bank's Osaka Main Branch regarding the rejection of overseas settlements, credit reviews, limit adjustments, and related foreign exchange delivery matters for Sumitomo-affiliated manufacturing companies over the past six months.]
Jointly authorized representative.
Yasui's eyes darkened slightly.
These few words were far more troublesome than any strongly-worded letter of protest.
It meant this was not just a complaint from a single company like Sumitomo Chemical, nor was it an emotional protest from some managing director after a rejection.
This was the Main Family, armed with the authorization of the manufacturing sector, formally standing in opposition to Sumitomo Bank's Osaka Main Branch.
He continued reading.
[1. Please list all records of "technical reviews" conducted by your bank over the past six months on the overseas trade settlement documents of Sumitomo Chemical, Sumitomo Metal, Sumitomo Electric, and other Sumitomo-affiliated industrial enterprises, and explain the specific basis for each rejection, correction, and delay in review.]
[2. Please list the estimated amounts of delayed deliveries, default risks, letter of credit reissue costs, shipping schedule change fees, and related commercial losses caused by the aforementioned rejections and review delays.]
[3. Please explain whether the relevant rejections and limit adjustments were based on unified credit policies, compliance review rules, or internal risk management requirements, and provide written documentation for the Main Family Legal Department to review.]
Seeing this, Yasui's expression still had not changed.
The first three points were still within the range of what the bank could explain.
Technical reviews could be chalked up to compliance and prudence.
Rejections could be chalked up to document discrepancies.
Limit adjustments could be explained as normal risk management under total volume regulation.
As long as the rhetoric was comprehensive enough, even if the Legal Department was unsatisfied, it would be difficult for them to directly strike at the Osaka Main Branch's Achilles' heel.
He turned to the second page.
And then, his gaze froze.
[4. Please explain whether the trade financing, margin arrangements, foreign exchange position utilization, and comprehensive credit line management related to Itoman Trading have affected the normal trade settlement limits, US dollar letter of credit issuance limits, foreign exchange delivery priority order, and short-term fund scheduling arrangements of Sumitomo-affiliated industrial enterprises.]
The office suddenly fell silent.
Yasui did not turn the page immediately.
His eyes were locked onto two sets of words.
Foreign exchange position utilization.
Delivery priority order.
The edge of the fax paper pressed against his fingertips.
The thermal paper was thin and brittle, and he did not realize how tightly his fingers had clenched until the paper quietly wrinkled under his thumb.
He paused for about three seconds, his eyes still nailed to the fourth point, without reading a single word further down.
The young staff member stood before the desk, not daring to breathe.
Yasui placed the fax back on the desk.
He closed his eyes, pressed his fingers against the space between his brows, and his breathing grew noticeably heavy.
The young staff member could even see his ears turning red.
"Who else received this fax?"
He was still doing his best to keep his tone calm.
The young staff member's Adam's apple bobbed.
"The fax notes... that the original has been sent to the Tokyo Head Office Legal Department. Copies have been CC'd to the secretariats of Sumitomo Chemical, Sumitomo Metal, and Sumitomo Electric."
Yasui did not speak immediately.
He took his fingers away from his brow and was about to cover his face with both hands, but remembering his subordinate was still in front of him, he pulled his hands back into fists.
Outside the window, Kitahama was as quiet as usual, with occasional cars passing by below.
Yasui reached out and pressed the intercom.
"Have Umeba come in."
His index finger left the call button, but he did not pull it back immediately, letting it pause on the surface of the phone for a moment.
Then, his voice dropped half an octave.
"Also, notify the legal representative. All verbal communications with the Main Family Legal Department this morning are to be suspended."
"Without my signature, not a single word is to be replied."
At the same time.
Sumitomo Chemical Osaka Headquarters.
The meeting hastily called by Managing Director Yukimasa Murata started twenty minutes ahead of schedule.
Several Section Chiefs and Assistant Directors from the Business Planning Section, Foreign Trade Management Department, Finance Department, and Legal Representative entered the conference room one after another.
No one spoke loudly.
Everyone held folders in their hands, but the expressions on their faces were more cautious than usual.
Fujiwara sat near the end of the table.
In front of her was a stack of newly photocopied documents.
The receipt from the advising bank, DBS Singapore.
A confirmed copy of the MT700 message from Citibank Tokyo Branch.
And a fax from the shipping company's Singapore agent regarding the adjustment of the place of bill of lading issuance.
As well as the confirmation letter from the Malaysian supplier withdrawing the notice to suspend shipment.
These papers were not thick.
But when placed on the conference table, their weight was far heavier than the few correction notices returned by Sumitomo Bank.
Murata sat at the head of the table, skipping any pleasantries.
"Fujiwara, report."
"Yes."
Fujiwara stood up.
Her voice was a bit tight at first, but it quickly stabilized.
"DBS Singapore has confirmed receipt of the MT700 message issued by Citibank Tokyo Branch and has completed the advising bank's internal registration. According to the advising bank's response, as long as we submit copies of the final commercial invoice and packing list before loading, we can proceed to the subsequent advising process."
She turned the first page.
"The shipping company's Singapore agent has accepted the adjustment of the place of bill of lading issuance. The issue of potential inconsistency in legal jurisdiction caused by issuing the bill of lading at Port Klang has been changed to issuance by the Singapore agent, in accordance with the advice of Mr. Nagata from Saionji Trading."
Someone in the conference room looked up.
Fujiwara continued:
"Regarding the Malaysian supplier, they have withdrawn the notice to suspend shipment. However, they require confirmation of the shipping schedule within forty-eight hours after the letter of credit advice officially takes effect. Otherwise, they may still reallocate the shipping space to other buyers."
The Assistant Director of the Finance Department could not help but ask:
"Did Saionji Trading handle all three issues that Sumitomo Bank requested corrections for?"
Fujiwara paused for a moment.
"Yes."
She pushed three copies of the annotated documents to the center of the table.
"First, the place of bill of lading issuance has been adjusted from Port Klang to being issued by the shipping company's Singapore agent."
"Second, the discrepancy between the beneficiary's address and the English abbreviation in the contract appendix has been reconfirmed, and a statement of consistency has been issued."
"Third, the correspondence between the certificate of origin and the insurance clauses was incomplete. Saionji Trading requested a supplementary explanation and realigned the insurance commencement point with the loading port records."
She paused, her voice dropping slightly.
"For all three items above, Sumitomo Bank had previously requested corrections but failed to provide a specific path for resolution. Saionji Trading provided actionable corrections within a single day."
The conference room fell silent.
No one said "defect to Saionji."
Nor did anyone say "the Hakusuikai was wrong."
After all, Sumitomo Chemical was a Sumitomo-affiliated enterprise, and its main bank was still Sumitomo Bank.
Many things could not be said aloud; once spoken, there would be no room for turning back.
But everyone understood one thing.
That Saionji Trading, which the Hakusuikai called an "outsider," had at least gotten the shipping schedule moving again.
Meanwhile, their own main bank had repeatedly returned the documents just when clearance was needed most.
The legal representative, looking down as he flipped through the documents, suddenly spoke.
"You all should have received the CC'd copy of the formal note from the Main Family Legal Department this morning."
The gazes of several people in the conference room shifted slightly.
Murata did not interrupt him.
The legal representative closed his folder.
"The fourth point of the note asks about the trade financing, margin arrangements, and foreign exchange position utilization related to Itoman Trading, and whether they affect the industrial enterprises' US dollar letter of credit issuance limits and delivery priority."
Having said this, he paused.
"If the Osaka Main Branch's previous reason for rejection was merely technical document issues, then Saionji Trading completing the corrections within a day and issuing the letter of credit through Citibank Tokyo Branch will make the Osaka Main Branch's explanation extremely difficult."
The Assistant Director of the Finance Department spoke in a very quiet voice.
"In other words, it is not that the bank could not process it."
"It is that they did not want to."
After these words fell, the conference room fell silent once again.
Murata looked up and glanced at the Assistant Director.
The Assistant Director immediately lowered his head and did not continue speaking.
Murata did not blame him.
He merely reached out and picked up the advice receipt from DBS Singapore, his gaze lingering on those few lines of English for a moment.
"We will continue to push forward with this business."
He placed the document back on the desk.
"Fujiwara, you will be responsible for keeping in touch with Saionji Trading's Osaka office. All corrected documents must be reviewed before the end of the day today."
"Yes."
"The Legal Department will prepare an internal opinion. Keep the wording restrained—just confirm the facts, and do not evaluate Sumitomo Bank."
"We do not need to shout slogans."
He raised his eyes, scanning everyone in the conference room.
"Whether the goods can be shipped, whether the schedule can be preserved, whether the client will default—these facts are far more useful than slogans."
No one refuted him.
Everyone knew that Sumitomo Chemical had already taken the first step.
And once this step succeeded, it would no longer be just Sumitomo Chemical's problem.
3:42 PM.
Sumitomo Metal Headquarters President's Office.
When Koichi Uchida received the CC'd copy of the formal note from the Main Family Legal Department, he was listening to the secretariat's report on the progress of a steel export business.
He was already in his early sixties, with his hair combed very neatly.
Normally, no matter what news he heard, visible emotions rarely appeared on his face.
But today, when he turned to the fourth point of the note, his fingers paused for a bit longer than usual.
The Chief of the Secretariat stood before the desk, his voice kept very low.
"President, the Osaka Main Branch has requested an additional review of our documents for a batch of steel exported from the Port of Kobe."
Uchida did not look up.
"The reason?"
"Foreign exchange position arrangements need to be reconfirmed."
The President's Office fell quiet for a moment.
Uchida slowly raised his eyes.
The Chief of the Secretariat continued:
"There are only nine business days left on the letter of credit opened by the buyer. If the negotiation and shipping document confirmation cannot be completed before next week, the other party may demand a reissue of the letter of credit. The cost of reissuance is temporarily estimated at..."
He glanced down at the document.
"...about 270,000 US dollars, and there is also a risk of shipping delays."
Uchida did not speak immediately.
He placed the Main Family Legal Department's note on the left, and Sumitomo Metal's own internal report on the right.
The two documents had different paper sizes and formats.
Yet placing them together now made them seem like two sides of the same coin.
On one side, the Main Family Legal Department was pressing for answers regarding foreign exchange position utilization and delivery priority.
On the other side, Sumitomo Metal's own steel export documents were being subjected to additional review by the Osaka Main Branch on the grounds that "foreign exchange position arrangements need to be reconfirmed."
Uchida finally confirmed that Sumitomo Metal's export credit was being thrown into the same pool, ranked alongside Itoman's bad debts.
In that pool, the manufacturing sector—which actually produced the steel, delivered the goods, and bore the default risk of overseas clients—was actually being forced to make way for a trading company that was already rotten to the core.
The Chief of the Secretariat asked in a low voice:
"President, should we inquire with the Osaka Main Branch first?"
Uchida looked at the two documents on the desk.
Only after a long silence did he speak.
"Inquire about what?"
The Chief of the Secretariat was startled.
"Ask them why they are reviewing it?"
Uchida's voice was very flat.
"They will just tell you that foreign exchange position arrangements need to be reconfirmed."
The Chief of the Secretariat fell silent.
This was, of course, nonsense.
It was also the safest, most compliant nonsense, and the hardest to immediately refute.
Uchida took off his glasses and slowly wiped the lenses with a handkerchief.
Standing before the desk, the Chief of the Secretariat inexplicably felt the air in the President's Office growing heavier and heavier.
A few seconds later, Uchida put his glasses back on.
"Is it confirmed that Sumitomo Chemical's letter of credit went through successfully?"
The Chief of the Secretariat answered immediately:
"Yes. DBS Singapore has registered it. The MT700 message issued by Citibank Tokyo Branch has been confirmed. The shipping company's Singapore agent has also accepted the adjustment of the place of bill of lading issuance."
Uchida nodded.
"Who is the head of Saionji Trading's Osaka office?"
"Currently, the external contact is Mr. Nagata. Higher-level contact is presumably still centrally arranged by Mr. Saionji Shuichi's office."
Uchida leaned back in his chair.
Outside the window, the Osaka sky was gloomy, and the gray clouds of pre-winter hung very low.
The distant buildings looked like a row of silent steel blocks, standing cold and hard in the Kitahama wind.
Uchida had originally not wanted to take a stand so quickly.
Sumitomo Metal was too heavy.
So heavy that every time it turned, it would draw too many eyes.
He could wait and see, he could bide his time, he could let Sumitomo Chemical try first, and he could let Sumitomo Electric and Sumitomo Light Metal test the waters.
But now, the Osaka Main Branch had put the knife to Sumitomo Metal's own export credit.
It was no longer a matter of waiting and seeing.
Uchida reached out and picked up the telephone on his desk.
The Chief of the Secretariat was slightly startled.
"President?"
Uchida did not look at him.
"Connect me to Tokyo."
The Chief of the Secretariat immediately stepped forward and flipped the address book to the private contact page for the Saionji family.
The call transfer took nearly a minute.
First there was brief static on the line, and then a steady voice came through.
"Saionji family, Secretariat to the Head of the Family."
Uchida took the receiver.
"This is Koichi Uchida of Sumitomo Metal."
The voice on the other end of the line immediately became more cautious.
"President Uchida, please hold."
The wait was short.
So short that Uchida could almost still hear the sound of his own fingertips lightly tapping on the desk.
Then, Saionji Shuichi's warm and steady voice came through the receiver.
"President Uchida, good afternoon."
"Hello, Mr. Saionji."
Uchida's voice was low.
He glanced at the steel export documents on the right side of the desk that the Osaka Main Branch had requested an additional review for, and then at the formal note from the Main Family Legal Department on the left.
Then, he spoke.
"Would it be convenient for your firm's Osaka office to receive a few steel export documents tomorrow morning?"
The clouds outside the window hung even lower.
No one spoke in the President's Office.
Standing before the desk with his head bowed, the Chief of the Secretariat was clearly aware of one thing.
After Sumitomo Chemical, the second vote had finally landed on the Saionji family's desk.