"The weight of the Jungwoo Group in Korea is undeniable. However, there's no need to be overly hostile towards foreign capital."
"That's why I'm asking for your help, Mr. Han."
"Mr. Han will be in a difficult position. Why wouldn't he want to help? But taking over a company temporarily, without clear benefits and with significant risks, is something no investor would do."
Speaking earnestly, Kim Hak-gwon's expression softened slightly.
"You shouldn't force Mr. Han as you would the presidents of Korean companies. If he withdraws from Korea, that's it. He came to Korea with good intentions; it wouldn't be right to let him leave with bad memories."
"Hmm."
President Kim Hak-gwon, whose true thoughts were revealed, cleared his throat.
"The era of state control is over. Given that we are under IMF management, we must acknowledge the new era of infinite competition. It's an era where foreign capital can acquire domestic companies, and domestic capital can acquire foreign companies. The government must now take a neutral stance."
"The economy must be controlled by the state."
This revealed the progressive thinking of President Kim Hak-gwon.
"The cost of inefficient management under state control is the current IMF crisis. In the era of free competition, excessive government intervention is a poison, not a cure."
Han Kyung-yeong nodded slightly at my words.
Seeing Han Kyung-yeong's focused expression, Kim Hak-gwon began to persuade me.
"Then, are you suggesting that we hand over Jungwoo to Future Investment and overseas private equity funds?"
"Whether Future acquires it or a private equity fund does, the government should not interfere heavily."
"We can't let Jungwoo be torn apart. Absolutely not."
While there was a concern for the national economy, it ultimately came down to a political decision.
"Then, you should proceed with negotiations with Future Investment."
"What you're saying is the same as the bureaucrats at the Ministry of Finance."
"I believe it's the best course of action."
He sighed deeply.
"Why do you think DreamHigh Investment is not interested in Jungwoo?"
"They might have their reasons. I had a rough idea when I came here, but the proposal you mentioned is unacceptable."
Kim Hak-gwon looked at Han Kyung-yeong.
"Is that really the case?"
Han Kyung-yeong, who had been expressionless, slowly nodded.
"It would be a lie to say they have no interest. However, Mr. President, no one knows how much debt Jungwoo has."
"You need to offer DreamHigh some conditions. Only then can we negotiate."
President Kim Hak-gwon frowned but did not argue.
After a moment, he called his secretary.
"Did you call me?"
"What is the exact amount of Jungwoo Group's debt?"
The secretary hesitated, looking at me and Han Kyung-yeong.
"Speak clearly."
"About 50 trillion won, I believe."
The amount of debt, more than expected, made Kim Hak-gwon's face waver for a moment, but he soon regained his composure.
"Excluding foreign debt, what is the domestic financial institutions' debt?"
"About 27 trillion won."
After deep thought, Kim Hak-gwon spoke heavily.
"We can't forgive the foreign debt, but we can forgive as much of the domestic financial institutions' debt as possible. In return, can you leave the management to Koreans while owning the company?"
Han Kyung-yeong pretended to think for a moment before speaking.
"I can't give a definite answer right now. I'll contact the U.S. and get back to you. I'll try to respond as quickly as possible."
"Thank you."
The meeting with the president ended there.
It was as I had expected.
* * *
After Han Kyung-yeong and Kim Mu-hyuk left, President Kim Hak-gwon continued his conversation with the secretary.
"Something seems off about Kim Mu-hyuk. Ask the director of the National Intelligence Service to investigate him thoroughly."
"Understood. But could it just be that he inherited money from Chairman Cheon?"
Kim Hak-gwon, who had been thinking seriously, shook his head.
"No, Mr. Han is watching Kim Mu-hyuk. I've been in politics for years; I know these things. Kim Mu-hyuk has some leverage over Han Kyung-yeong, big or small. Or he might have a connection with the owner of DreamHigh. Contact the embassy in the U.S. as well."
"Understood."
"Make sure not to draw attention. We don't want to upset Mr. Han. Focus on Kim Mu-hyuk, from start to finish."
"Understood."
With decades of experience in politics, Kim Hak-gwon instinctively felt there was something about Kim Mu-hyuk.
"Tomorrow, meet with the creditors and find out the total debt of the Jungwoo Group. We need to know how much we can forgive."
"Do you plan to hand it over to DreamHigh?"
Kim Hak-gwon nodded.
"No matter how I think about it, Future is not the right choice. Their funding is too opaque. There are rumors about Hong Kong capital, but the National Intelligence Service couldn't confirm it, right?"
"Yes, we found out that the shares are distributed among five corporations, but we couldn't identify the owner of the investment firm. They are all companies in tax havens."
The secretary's words made Kim Hak-gwon sigh deeply.
"We can't tell if the money is from China, Japan, or even North Korea. But DreamHigh is an investment firm based in the U.S., isn't it?"
His tone seemed to be reassuring himself.
"Let's wait for their response. Prepare in advance. I didn't expect Chairman Park to act this way. He said Jungwoo was fine when he acquired Yong Sang Motors at the beginning of the year..."
As the saying goes, you can know the depth of a ten-foot river, but not the depth of a one-foot person's heart.
President Kim Hak-gwon could only blame his own naivety.
* * *
"What do you think, brother?"
"About the Jungwoo Group? Honestly?"
"Yeah."
"Do we really need to take on a mountain of debt? We can make more money by investing in stocks and currencies. If we need a company, there are plenty of good ones in the U.S. Why would we want to acquire a Korean company?"
Han Kyung-yeong didn't fully understand the power of Korean conglomerates.
Having spent more time in the U.S. than in Korea, he viewed Korea from an American perspective.
"Being a chaebol in Korea isn't just about having money. The Il Sung, Daehyun, and most chaebols form the upper class of Korean society."
"I know. The ultimate goal of this IMF crisis is to dismantle Korean chaebols, right?"
"It's not that simple. Even if it seems unfair to the U.S., chaebols are an unshakable power in Korea. Unless we become a defeated nation like Japan and are forced to be torn apart, it will be difficult."
"Hmm..."
"In Korea, the title of chaebol is significant. I plan to secure it first."
Han Kyung-yeong nodded.
"Got it. If that's what you think, we should do it. With 50 trillion won in debt, how much can we get forgiven?"
"At least half. But I think it's better to take on all the debt."
"What? Why?"
"Let's use the debt as an excuse to conduct a free capital reduction and delist the core subsidiaries voluntarily."
Han Kyung-yeong, who had been calculating in his head, shook his head.
"That's not going to be simple."
"We have experts. Even if it's complicated, it will be cheaper. Use it as a condition. We'll delist voluntarily, but we won't move the company abroad, and we'll choose the management from the original Jungwoo Group executives."
"Even if we don't meet the requirements for voluntary delisting, can we still do it?"
"Exactly. We'll try to secure as much equity as possible, but some will resist."
"Excluding the shares held by Park Dae-ho and domestic financial institutions, the circulating shares of each company are around 20% to 30%, right?"
"It will be less. I have a lot, and Eva has a significant amount too. The problem is the shares held by private equity funds. You can negotiate with them and offer a premium. If we announce a free capital reduction, we can buy them at 1.5 times the price."
To delist voluntarily, the major shareholder needs to hold 95% of the shares.
Even if we try to gather as many shares as possible through a public offering, it won't be easy because most of the core subsidiaries' shares are held by institutions.
"The acquisition price will be 100 won, but we'll take on all the debt. We'll discuss the details with the experts."
"Okay."
Looking out the window at the receding Blue House, Han Kyung-yeong and I were lost in thought.
After much discussion with American and Korean accounting experts over two weeks, Han Kyung-yeong decided to take on the debt and acquire the company.
Since the debt of the Jungwoo Group had already exceeded capital impairment, Han Kyung-yeong believed that debt forgiveness was possible.
"Brother, do your best. The experts are better than me."
— Yeah. I'll contact you after the negotiations with the government.
After ending the call with Han Kyung-yeong, I smiled at Manager Ma.
"How many people have arrived?"
"A team of ten, including someone to handle administration and security."