De Guise recalls some years earlier when Malraux, a French soldier and ex-Hong Hua Hui member, tried to kidnap his sister Sophie. As de Guise discusses his plans with a Kitaoji representative, the assassin Panda enters, but is foiled by Kenshiro in disguise who was shadowing de Guise. De Guise takes Kenshiro to see his sister and explains that he and Kitaoji plan to create a Shangri-La in Shanghai for displaced people in the coming war in Europe...