The Genius Grandson of the Loan King - Chapter 98 (98/840)
< The President's Suspicion. >
#98
The President's Suspicion.
"The weight of the Jungwoo Group in Korea is absolutely not to be underestimated. However, there's no need to completely reject foreign capital."
"That's why I'm asking President Han for help."
"President Han will be in a difficult position. Why wouldn't he want to help? But taking over a company temporarily, without any clear benefits and with so much risk, is something no investor would want to do."
Speaking earnestly, Kim Hak-kyun's expression softened slightly.
"You shouldn't force President Han like you do the heads 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-kyun, realizing his true thoughts had been exposed, cleared his throat.
"The era of state control is over. Given that we are now 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-kyun.
"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-kyun began to try to persuade me.
"Then are you suggesting 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 might be 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 what the bureaucrats at the Ministry of Finance and Economy would say."
"I believe it's the best course of action."
He sighed deeply.
"Why do you think Dream High Investment is not interested in Jungwoo?"
"There might be some thoughts. When I came here, I had a rough idea, but the proposal you mentioned, Mr. President, is unacceptable."
Kim Hak-kyun 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. But, Mr. President, no one knows how much debt Jungwoo has."
"You need to offer some conditions to Dream High. Only then can we negotiate."
President Kim Hak-kyun frowned but did not argue.
After a moment, he called for 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 and properly."
"…Around 50 trillion won, I believe."
Kim Hak-kyun's face showed a moment of shock at the higher-than-expected debt, but he quickly composed himself.
"Excluding the debt abroad, what is the domestic financial institutions' debt?"
"About 27 trillion won."
After some deliberation, Kim Hak-kyun spoke heavily.
"We cannot forgive the debt abroad, but we will forgive as much as possible of the domestic financial institutions' debt. In return, can you leave the management to Koreans while retaining ownership?"
Han Kyung-yeong pretended to think for a moment before speaking.
"I cannot give a definite answer right now. I will contact the U.S. and get back to you with a decision. I will try to respond as quickly as possible."
"Thank you."
The meeting with the president ended there.
It was exactly as I had expected.
* * *
After Han Kyung-yeong and Kim Mu-hyuk left, President Kim Hak-kyun 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-kyun, who had been frowning in thought, shook his head.
"No, President 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 be connected to the owner of Dream High. Contact the embassy in the U.S. as well."
"Understood."
"Make sure not to draw attention. We don't want to upset President Han. Focus on Kim Mu-hyuk, from the beginning to the end."
"Understood."
With decades of experience in politics, Kim Hak-kyun 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 transfer it to Dream High?"
Kim Hak-kyun 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-kyun sigh deeply.
"We can't tell if the money is from China, Japan, or even North Korea's slush fund. But Dream High is an investment firm based in the U.S., isn't it?"
It seemed he was trying to reassure 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-kyun 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 a lot of money. The Il Sung, Dae Hyun, and most chaebols form the upper class of Korean society."
"I know that. The ultimate goal of this IMF crisis is to dismantle Korean chaebols, right?"
"It's not that simple. While it may seem unfair to the U.S., chaebols in Korea are an unshakable power. It would be difficult unless Korea becomes a defeated nation like Japan and is torn apart."
"Hmm…"
"The title of chaebol is significant in Korea. 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?"
"More than half, I think. But I've been thinking, it might be 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."
As Han Kyung-yeong calculated in his head, he shook his head.
"…That's not going to be simple."
"So what? We have experts. The more complex, the cheaper it will be. Use that as a condition. We'll delist voluntarily, but we won't move the company abroad, and we'll choose the management from the existing executives of the Jungwoo Group."
"Even if we don't meet the requirements for voluntary delisting, can we still do it?"
"Exactly. We'll try to secure as many shares as possible, but some will resist until the end."
"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. With 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 buy as many as possible through public offerings, it won't be easy since 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 those who will handle administration and immediate security."
"Only one team?"
"Yes, ten people."
I tilted my head.
"Isn't that too few?"
"The team that came this time is dedicated to the boss's security, and they are all top-notch from Black Bear. For the grandmother's security, we plan to hire domestic personnel. It's better to have Koreans than foreigners."
As Manager Ma said, it did seem a bit odd to entrust the grandmother's security to foreigners.
"When can we hire domestic personnel?"
"The announcement has already been made, and interviews for candidates introduced through connections will begin as soon as the first team arrives. They aim to complete all preparations within a month."
I nodded.
"Are the current staff handling security?"
"Yes, they are stationed next door and are maintaining a distance to avoid inconvenience."
"No suspicious movements?"
"No suspicious movements since then."
"Don't let your guard down. They are likely already in the country."
"Understood."
While I was confident that money could solve the problem, I couldn't predict their actions.
If cornered, they might resort to terrorism against my loved ones. We needed to be well-prepared.
"How is the investigation into the yakuza organization in Japan with a Korean leader going?"
"The team sent to check found that most are affiliated with the Yamaguchi-gumi. Given their long history and deep political connections, it would be difficult to oppose them."
"Hmm…"
Manager Ma suggested, "Instead of trying to recruit a yakuza with a Korean leader, what about inducing a split in the Yamaguchi-gumi?"
"Is that possible?"
"Reports indicate that the Yamaguchi-gumi has many factions. Supporting a vice-leader who has a bad relationship with the current leader might work."
I thought about it.
'Inducing internal conflict.'
A thought came to me.
A few years later, the Yamaguchi-gumi would split into two.
"Let's pursue that. Find out which faction can completely split from the current leader. There will likely be a lot of noise over the succession issue."
"Should I start approaching them?"
"Wouldn't that be dangerous?"
"Money can make things possible in Japan."
"Don't worry about the money; just work on splitting them."
"Understood, boss."
Supporting a faction with funds could give them a chance to succeed, and they might act quickly.
"Handle this directly, Manager Ma. Money is no object. We plan to exploit Japan as well."
Japan was also in crisis.
The bankruptcy of old companies, the collapse of securities firms and banks.
Despite overcoming crises with abundant dollars and American help, the situation remained precarious.
Just then, the phone rang.
"Yes, this is Kim Mu-hyuk."
— Mr. Kim Mu-hyuk? Nice to meet you.
"Who is this?"
— Watanabe Saoru.
The caller was speaking in English.
I recognized the name but pretended not to know.
"Never heard of you."
— I'm starting a new business in Myeongdong. I'd like to meet you.