#98 The President's Suspicion.
“The importance of the Jungwoo Group in Korea is something that cannot be ignored. But there’s no need to be so exclusive just because it’s foreign capital.”
“Isn’t that why I’m asking you, Boss Han?”
“Boss Han is probably in a difficult position as well. Why wouldn’t he want to help? But to temporarily take over a company… It’s a perilous task with no clear profit guarantee. What kind of investor would be willing to do that?”
As I spoke in an earnest tone, Kim Hak-kwon’s expression softened slightly.
“You shouldn’t try to force Boss Han the way you do with the chairmen of our country’s companies. He’s someone who can just pull out of Korea. He came to Korea with good intentions, should we let him leave with only bad memories?”
“Hmph.”
President Kim Hak-kwon, whose true intentions were exposed, let out a dry cough.
“The era of state control is over. Now that we are under the management of the IMF, we must accept that a new age of infinite competition has begun. It’s an era where a domestic company can be acquired by foreign capital, and domestic capital can acquire a foreign company. The government will have to maintain the position of a bystander from now on.”
“The economy must be under the state’s control.”
This was a line that revealed the progressive thinking of President Kim Hak-kwon.
“The IMF is the price we are paying for lax management under state control. In an age of free competition, excessive government intervention is not medicine, but poison.”
Han Gyeong-yeong gave a small nod at my words. Seeing Han Gyeong-yeong focused on my words, Kim Hak-kwon soon began trying to persuade me.
“Then are you saying we should hand Jungwoo over to Mirae Investment and foreign private equity funds?”
“Whether Mirae acquires it or a private equity fund acquires it, I’m saying the government should not interfere too much.”
“I cannot let Jungwoo be torn to shreds. Absolutely not.”
While he might have the national economy in mind, it was ultimately a political choice.
“Then you can proceed with negotiations with Mirae Investment.”
“What you’re saying now is the same as what the bureaucrats at the Ministry of Finance and Economy are saying.”
“I believe it’s the best option.”
He let out a deep sigh.
“Why do you think Dreamhigh Investment is not interested in Jungwoo?”
“I’m sure there’s some thought. I had a rough idea when I came here with him, but what you proposed, Mr. President, was an unacceptable offer.”
Kim Hak-kwon looked at Han Gyeong-yeong.
“Is that really so?”
Han Gyeong-yeong, who had been wearing an indifferent expression, slowly nodded his head.
“It would be a lie to say I’m not interested. But Mr. President, no one knows how much debt Jungwoo has.”
“You’ll have to talk about what kind of terms you can offer Dreamhigh. Only then can we negotiate.”
President Kim Hak-kwon frowned but did not refute it. A moment later, he summoned his chief of staff.
“You called for me.”
“What is the exact amount of the Jungwoo Group’s debt?”
The chief of staff hesitated to answer as he looked at me and Han Gyeong-yeong.
“Don’t mind them, speak plainly.”
“...I understand it to be around 50 trillion won.”
Kim Hak-kwon’s face wavered for a moment at the debt, which was larger than he had thought. But he quickly composed his expression.
“Excluding the foreign debt, what is the debt held by domestic financial institutions?”
“It’s about 27 trillion won.”
Kim Hak-kwon, who had been deep in thought, opened his mouth with a heavy heart.
“I can’t forgive the foreign debt, but I will write off as much of the debt held by domestic financial institutions as possible. In return, you can own it, but could you entrust the management to a Korean?”
Han Gyeong-yeong pretended to think for a moment before speaking.
“It’s difficult to give you a definite answer right now. I will contact America, make a decision, and let you know. I will give you an answer as quickly as possible.”
“Please do.”
The meeting with the president ended like that. It was exactly as I had predicted.
After Han Gyeong-yeong and Kim Mu-hyeok left, President Kim Hak-kwon continued his conversation with his chief of staff.
“I feel like there’s something about that fellow, Kim Mu-hyeok. Tell the Director of the National Intelligence Service to look into him properly.”
“I understand. But even if there is something, wouldn’t it just be that he inherited Chairman Cheon’s money?”
Kim Hak-kwon, who was pondering with a serious expression, shook his head.
“No, Boss Han is watching Kim Mu-hyeok’s every move. I’ve been in politics for years, you think I wouldn’t know? Whether it’s big or small, Kim Mu-hyeok must have a leash on Han Gyeong-yeong. Or perhaps the owner of Dreamhigh has a connection with Kim Mu-hyeok. Contact the embassy in America as well.”
“Understood.”
“Do not make any obvious moves. We can’t afford to get on Boss Han’s bad side for no reason. Leave Boss Han alone and investigate Kim Mu-hyeok, from beginning to end.”
“Yes.”
Kim Hak-kwon, who had rolled in the political arena for decades, instinctively felt that there was something about Kim Mu-hyeok.
“Tomorrow, meet with the creditor groups and find out the total debt of the Jungwoo Group. We need to see how much can be written off.”
“Are you thinking of handing it over to Dreamhigh?”
Kim Hak-kwon nodded.
“No matter how I think about it, Mirae is not the one. Its funds are too opaque. There are rumors that it’s Hong Kong capital, but… the National Intelligence Service couldn’t figure it out properly either, right?”
“Yes, we found out that the shares are divided among five corporations. But we couldn’t identify the owner of the investment company. They are all companies in tax havens.”
At the chief of staff’s words, Kim Hak-kwon let out a deep sigh.
“There’s no way of knowing if that money is Chinese, Japanese, or even North Korean secret funds. But Dreamhigh is an investment company with its headquarters in America, isn’t it?”
It was an attitude as if he were reassuring himself.
“For now, let’s wait for their answer. And prepare in advance. I never thought Chairman Park would be like this. The same person who said Jungwoo was fine when acquiring Yongsang Motors early this year…”
It is said that you can know the depths of ten fathoms of water, but not the heart of a single man. President Kim Hak-kwon could only blame his own foolishness.
“What do you think, brother?”
“Jungwoo Group? Should I be honest?”
“Yeah.”
“Is there a need to acquire a mountain of debt? Can’t we make more just by investing in stocks and currencies? If we need a company, there are many good, solid companies in America. Is there any reason to acquire a company in Korea?”
Han Gyeong-yeong didn’t truly understand the power of Korean corporate groups. Having spent more time in America than in Korea, he was looking at Korea from an American perspective.
“In Korea, being a conglomerate isn’t just about having a lot of money. Ilseong, Daehyun, most of the conglomerates make up Korea’s upper class.”
“I know that. The ultimate goal of this IMF crisis is the dissolution of the Korean conglomerates, isn’t it?”
“It’s difficult. In America’s eyes, it may seem unfair, but in Korea, the conglomerates are an absolute power that never loses. It’s hard unless the country becomes a defeated nation like Japan and is forced to be torn apart.”
“Hmm…”
“In Korea, the title of a conglomerate is huge. I plan to secure that first.”
Han Gyeong-yeong nodded his head.
“Got it. Well, if that’s what you think, we should do it. With 50 trillion in debt, how much can we get written off?”
“We should be able to get rid of more than half. But I’ve thought about it, and I think it would be better to acquire it with all the debt.”
“Huh? Why?”
“Let’s use the debt as an excuse to reduce capital for no compensation, and for the core affiliates, let’s just delist them from the stock market.”
Han Gyeong-yeong, who was running the numbers in his head at my words, shook his head.
“...It’s not going to be simple.”
“We have experts, so what if it’s complicated? It’ll be cheaper that way. Propose that as our condition. We’ll voluntarily delist, but in return, we won’t move the companies from Korea to another country, and we’ll select the management from the existing executives of the Jungwoo Group.”
“Even if we don’t meet the requirements for voluntary delisting, you want them to let us do it?”
“That’s right. I’ll try to secure as many shares as I can, but there will be people who hold out until the end.”
“Excluding the shares held by Chairman Park Dae-ho, his related parties, and domestic financial institutions, wouldn’t the number of circulating shares be around 20% to 30% for each company?”
“It’ll be less than that. I own a lot too. Eva also has quite a bit. The problem is the shares held by private equity funds, but you’ll have to negotiate and acquire those at a premium, brother. If we announce a capital reduction without compensation, you should be able to buy them for 1.5 times the price.”
To voluntarily delist, the major shareholder had to hold 95% of the shares. Even if we tried to gather as much as possible through a public tender offer, it was not an easy task since most of the shares of the Jungwoo Group’s core affiliates were held by institutions.
“The acquisition price is 100 won. But the condition is that we take on all the debt. Let’s talk about the details with the experts.”
“Okay.”
Looking at the receding Blue House outside the window, Han Gyeong-yeong and I were each lost in thought. After two weeks of numerous discussions with accounting experts in America and Korea, Han Gyeong-yeong decided to proceed with the acquisition by taking on the debt.
Since the Jungwoo Group’s debt had already exceeded its capital, Han Gyeong-yeong was of the opinion that a debt write-off was also possible.
“You handle it well, brother. The experts will be better than me.” — Yeah.
I’ll call you when the negotiations with the government are over. After finishing the call with Han Gyeong-yeong, I smiled at Section Chief Ma in front of me.
“How many people have come in?”
“A team to handle administration and a first team that can be used as bodyguards immediately have arrived.”
“Just one team?”
“Yes, ten people.”
I tilted my head.
“Isn’t that too few?”
“The team coming this time is a team dedicated to the Boss’s security, so I heard it’s composed only of aces from Black Bear. For your grandmother’s security, we plan to recruit personnel from within the country. The consensus was that Koreans would be better than foreigners.”
As Section Chief Ma said, leaving my grandmother’s security to foreigners was a bit unsettling.
“When can we recruit domestic personnel?”
“The announcement has already been made, and for the people introduced through connections, I heard the team leader will personally test and select them as soon as the first team arrives. He said he would finish all preparations within a month.”
I nodded my head.
“Section Chief Ma’s employees are handling security for now, right?”
“Yes, they are stationed in the house next door and are providing security from as far away as possible to avoid causing any inconvenience.”
“Any suspicious movements?”
“There have been no suspicious movements since then.”
“Don’t let your guard down. They’re probably already in the country.”
“Yes.”
I was confident that I would never lose when it came to money, but I couldn’t know what actions they would take. If they were cornered, they might commit acts of terror against the people around me. I had to be thoroughly prepared.
“What about the request I made to investigate whether there are any yakuza organizations in Japan with a Korean-Japanese boss?”
“I sent employees to check, and most of them belong to the Yamaguchi-gumi. As it’s an old organization, it has many political ties, so it seems difficult to go against them.”
“Hmm…”
As I fell into thought, Section Chief Ma spoke.
“Rather than finding and nurturing a yakuza group led by a Korean-Japanese, how about inducing a split within the Yamaguchi-gumi?”
“Is there a way?”
“I received a report that since it’s such an old and large organization, there are many factions. How about supporting one of the underbosses who is on bad terms with the current boss?”
I fell into thought again.
‘Induce an internal fight.’
Something suddenly came to mind. In a few years, the Yamaguchi-gumi would split in two.
“Let’s dig into that. Find out which side we need to support to make them split completely from the current boss. There will probably be a lot of noise over the succession issue.”
“Yes, should I tell them to approach?”
“Won’t it be dangerous?”
“In Japan, too, anything is possible with money.”
“Don’t worry about the money and work on making them split.”
“I understand, Boss.”
If I provided the funds, there was a high chance they would judge they had a chance of winning and make their move early.
“Section Chief Ma, you handle that matter directly. It doesn’t matter how much money it takes. I plan to clean out Japan as well.”
Japan was also in a crisis. The bankruptcy of old companies, the collapse of securities firms and banks. They were overcoming crises moment by moment with abundant dollars and American help, but it was precarious all the same.
Just then, the phone rang.
“Yes. This is Kim Mu-hyeok.” — Mr. Kim Mu-hyeok?
It’s a pleasure.
“Who is this?” — This is Watanabe Saoru.
The other person was speaking in English. I knew who he was as soon as I heard the name, but I pretended not to know and spoke calmly.
“I’ve never heard that name before.” — I’m someone who has recently started a new business in Myeon District.
I would like to meet you once. What kind of trick is this now?
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