Chapter 101: A Government-Led Big Deal

“So, you’re telling me Kim Mu-hyeok knows the CEO of Fuure Investments?”

In the Blue House office, President Kim Hak-gwon furrowed his brows as he listened to a report from National Intelligence Director Lee Chan-jong.

“Yes. Technically, the ownership of the Mirae Building falls under a small construction company called Geukseong Construction. But in reality, Kim Mu-hyeok is the one pulling he strings.”

Following the President’s orders, the National Intelligence Service (NIS) had launched a thorough investigation into all of Kim Mu-hyeok’s activities in Kora, deploying significant manpower to gather as much information as possible.

“We also discovered that he met with a woman named Eva Zhu in Hong Kong, and they’ve had several meetings in Korea as well.”

President Kim Hak-gwon remained silent as he processed the information.

“It was also confirmed that he had a private meeting with the IMF Managing Director at a hotel, just one day before the government negotiations.”

“You mean he met with Kandehshi?”

“Yes. We don’t know what they discussed, but it was a lengthy meeting.”

“What kind of connection do they have?”

“We haven’t been able to find that out yet.”

Kim Hak-gwon massaged his temples, clearly frustrated.

The deeper they dug into Kim Mu-hyeok’s background, the mre mysterious he became.

“What else?”

“He’s been on bad terms with the Cheongpung Group. We’re not sure why, but they’ve clashed several times. Notably, he was involved in a major gang dispute in Gangnam a few years ago, where he managed to eliminate one of Cheongpung’s weapons caches.”

Kim Hak-gwon’s eyes widened in surprise.

“He’s not on good terms with Cheongpung?”

“That’s right. It’s likely Kim Mu-hyeok played a significan role in Han Gyeong-yeong’s decision to back your campaign. Han probably wanted to weaken Cheongpung’s influence in the conservative party.”

“That makes sense now. So, that’s why Han didn’t make any demands. Weakening Cheongpung was already a win for him just by getting me elected.”

The President nodded in understanding.

After a few minutes of silent contemplation, he finally spoke.

“If both Mirae and Dream High are tied to Kim Mu-hyeok, then haven’t we ben dancing in the palm of his hand this whole time? Does it even matter who takes over?”

“That, we’re not sure of.”

“Is there any leverage we can use against him? Anything that could put him on a leash?”

The NIS Director lowered his head.

“We haven’t found any evidence of illegal activities on his part. I’m sorry, sir.”

“There’s no need for you to apologize.”

President Kim Hak-gwon, still deep in thought, picked up the phone. Moments later, the Chief Secretary entered the office.

“Yes, Mr. President?”

“Take a seat.”

Kim Hak-gwon glanced between the Chief Secretary and the NIS Director before sharing his plan.

“Let’s proceed with transferring Jungwoo Group to Dream High as agreed. The negotiations are already wrapped up, right?”

“Yes, sir.”

“Send someone to brief Chairman Park Dae-ho and the creditor banks. Make sure they understand the government’s stance.”

“Understood.”

“And keep a close eye on Kim Mu-hyeok.”

“Yes, Mr. President.”

“Also, let’s take a look at Han Gyeong-yeong’s press conference.”

The Chief Secretary turned on the television.

Watching Han Gyeong-yeong’s press conference in silence, the President’s brows furrowed.

“Didn’t we warn the major conglomerates?”

“We did. But you know how they are—a little greed is hard to shake off. They might not have acted directly, but it’s obvious they’re using the media to stir things up.”

“Still haven’t learned their lesson, huh? They’re all too greedy. They want the government’s support, yet they’re scheming behind our backs?”

Kim Hak-gwon clicked his tongue in disapproval, his frustration evident. The NIS Director and Chief Secretary exchanged cautious glances.

“What should we do?”

“No more nice words. Summon the heads of the top 20 conglomerates. I want to meet them tomorrow morning.”

“Understood.”

The next day, an MOU was signed between Han Gyeong-yeong and the major creditor banks.

The agreement included a 30% reduction in debt, to be paid back over five years, and the complete transfer of all shares in Jungwoo Group’s subsidiaries held by the creditor banks.

With that, Jungwoo Group officially came under the control of Dream High.

Meanwhile, President Kim Hak-gwon dropped a bombshell on the gathered conglomerate heads.

“It seems you gentlemen still don’t understand the gravity of the situation.”

“No, Your Excellency.”

“Enough. The government will take the lead in consolidating overlapping subsidiaries in redundant industries. Make sure you’re all aware of that.”

“Mr. President!”

“Your Excellency!”

The unexpected announcement left all the gathered CEOs in shock. Some even stood up in protest, but Kim Hak-gwon’s expression remained firm.

“You don’t have to participate. But any company that opposes government policy will receive no support.”

None of the CEOs could muster a reply.

“All of this is because of your reckless expansion. You’ve been over-investing in overlapping industries just to outdo each other. This inefficiency has been a problem since the last administration. Has anything changed? Not a thing, as far as I can tell.”

Kim Hak-gwon scanned the room, his tone harsh.

“It’s your fault we’re now facing an economic crisis.”

In the President’s view, the conglomerate heads were to blame for the IMF crisis.

And he wasn’t entirely wrong.

“The relevant agencies will gather opinions and make the final decisions. This is your last warning. Take no action. Any company caught bribing officials or attempting to influence their decisions will be made an example of.”

Even during his transition team days, President Kim Hak-gwon had discussed the idea of business swaps.

For years, opposition from bureaucrats and negative public opinion had delayed those plans. But the recent actions of the conglomerates had angered him enough to push through a forced government-led business swap.

President Kim Hak-gwon’s ultimate goal was to reform the conglomerates.

* * *

From the day the MOU was signed between Han Gyeong-yeong and the creditor banks, the government began rolling out a series of new policies.

The ‘Big Deal’ was announced earlier than expected in the original timeline.

“We can’t avoid it either, can we?”

At my question, Han Gyeong-yeong closed the document he was reading and nodded.

“The government’s main condition is that we actively participate in the Big Deal they’re orchestrating.”

The government was swiftly pushing forward, silencing opposition with the argument that conglomerate reform was crucial to economic recovery.

“What do we have to give up?”

“Personally, I’d like to offload the electronics and automotive divisions. They’re a complete mess. Other subsidiaries are just as bad, but those two are the worst off.”

A large portion of Jungwoo Motors’ debt—30%—was concentrated in the automotive division.

Despite building a factory in Eastern Europe and expanding aggressively, the company’s debts and losses had only increased.

“Let Daehyeon take the automotive division. As for electronics… we’ll wait and see.”

“The unions are going to push back hard.”

“Let the government deal with that. It’s their policy. We just have to follow along.”

Korea was known for its powerful, militant labor unions.

“Let’s wait and see how things progress.”

“Got it.”

The government was in the midst of discussions with the conglomerates, and without warning, they announced the first phase of the Big Deal through a briefing.

The announcement that the automotive and electronics sectors would be the first to undergo restructuring sent a wave of fear through the affected companies.

A few days later, after meeting with the Blue House, Han Gyeong-yeong returned, shaking his head as he described the tense atmosphere among the conglomerates.

“The level of maneuvering and subtlety was insane. They even threatened to cut off all credit loans. I was shaking just listening to them.”

“Ha! Guess that’s karma. But what did they say to you? I doubt they can scare you with loan threats.”

“They asked me to choose between electronics and automobiles.”

“Then give up the automotive division and focus on saving electronics.”

As long as Daehyeon Motors existed, the automotive market in Korea was already saturated.

“We’ve already agreed to let Daehyeon take over Ahshin Motors, and they want to merge Ilseong Motors with Jungwoo Motors. But Ilseong wants us to give up electronics in exchange for taking on the automotive division.”

“That’s ridiculous. Ilseong Motors isn’t even a real car company.”

Han Gyeong-yeong nodded slightly, agreeing with my assessment.

“So, should we give up the automotive division? But will Ilseong really give up electronics? That’s absurd.”

With Daehyeon set to acquire Ahshin Motors, handing over Jungwoo Motors to Daehyeon was out of the question. No matter how much the government pushed for the Big Deal, it was equally important to prevent Daehyeon from monopolizing the market.

“Tell Ilseong we’ll hand it over. Otherwise, we’ll handle things our own way.”

“But we promised to support the government’s policy.”

“You’ve seen the state of Jungwoo Group, right? Even I didn’t expect things to be this bad. It’s worse than we thought.”

After the MOU was signed, both U.S.-based accounting firms and domestic experts combed through Jungwoo’s financial records one by one.

It had been a grueling process, thanks to their outlandish accounting methods, but they even uncovered fraudulent entries the government had missed.

Jungwoo had spread its operations worldwide, with fraudulent sales as the norm and triple-counted real estate assets being only the tip of the iceberg.

To hide the losses at Jungwoo Motors, they had offloaded all their bad inventory onto overseas subsidiaries and manipulated the books.

The government had estimated 27 trillion won in losses, but we found an additional 17 trillion. Chairman Park Dae-ho was nothing short of impressive.

“What’s the government saying?”

“They’re trying to wash their hands of it, saying it’s no longer their responsibility.”

“An MOU can be canceled at any time. Give them a little scare. I needed Jungwoo, but that doesn’t mean we’re going to play the fool.”

Just because we had the funds didn’t mean we had to shoulder everything like a sucker.

“Don’t push too hard. How much debt does Jungwoo Motors have?”

“One moment.”

Han Gyeong-yeong flipped through the documents in front of him and explained.

“4.56 trillion won.”

“And how much is Chairman Park Dae-ho’s total worth, including his stock and personal assets?”

“Even if he sells off everything, it’s only about 500 billion won.”

The aftermath of the IMF crisis had drastically reduced the market value of Korea’s major corporations.

At the current market value, even Ilseong Electronics, Korea’s top company, could be bought for 2.7 billion dollars.

In fact, even mid-sized U.S. private equity firms had around 2 billion dollars in assets.

“That’s not much.”

“But he’s probably got a lot of hidden wealth.”

“Can we track it down?”

“It’ll take time, but it’s possible.”

“Let’s wrap up the acquisition first. We’ll hand over Jungwoo Motors to Ilseong, and in return, we’ll take Geumsung Semiconductors.”

“Geumsung Semiconductors? Daehyeon Electronics was planning to buy up the shares and integrate it.”

“They won’t be able to pull it off. Acquiring Ahshin Motors alone will stretch them thin. If we step in, Daehyeon will be grateful.”

Faced with the government’s Big Deal, the conglomerates had no choice but to comply.

Without government support, they’d be forced to sell off their key subsidiaries.

The automotive sector would see Jungwoo Motors merge with Ilseong Motors, while Daehyeon Motors would take over Ahshin Motors.

In the semiconductor and electronics sectors, Jungwoo’s semiconductor division would merge with Geumsung Electronics, while Jungwoo’s home appliance division would be absorbed by Geumsung.

Daehyeon Refinery would merge with Hyeonseong Energy in the oil sector.

Additional sectors, like petrochemicals, rail vehicles, aviation, power generation, and ship engines, would be consolidated into six newly formed companies.

Among the top 10 conglomerates, KS Group was the only one to escape the effects of the Big Deal.

Although Geumsung gave up its semiconductor division, it managed to remove restrictions on its shares in the information technology business. However, the chairman of Geumsung was so upset about losing the semiconductor division that he disappeared from public view.

“So, we got the semiconductors like you wanted, but was giving up the home appliances worth it?”

“Jungwoo’s appliances lag far behind Ilseong and Geumsung. Their technology is so outdated that being ‘durable’ is their only selling point. But in the future, semiconductors will dominate everything.”

The Big Deal process naturally helped Jungwoo Group shed a lot of its debt.

Much of Jungwoo Motors’ debt was passed on to Ilseong, which was taking over the automotive division.

However, not all of the forced mergers were successful.

Critics argued that the Big Deal had disproportionately benefited Daehyeon Group, which had gained the most from the restructuring.

Although Han Gyeong-yeong kept most of Jungwoo’s management in place, he made it clear that the days of reckless management were over. He began restructuring the company in the American style.

With the government’s help, Han was able to delist all of Jungwoo’s subsidiaries, giving him full control to run things his way. He no longer had to answer to anyone.

Eva, meanwhile, started shopping around for financial companies as she pleased.

Everything seemed to be going smoothly, until one phone call shattered my peace.