Chapter 91: Business and Bonds

When I mentioned I wanted to take over Jungwoo Group, President Yoon only chuckled.

“You know, just having money doesn’t mean you can take over a conglomerate, right?”

“I know that, but if we don’t act now, especially with the IMF having taken over our economic sovereignty, we might miss our chance.”

The chaebols have been the backbone of our country’s economy since the Japanese occupation.

Beyond wealth, their intricate web of connections, formed through marriage and social ties, binds them together like a spider’s web.

Much like the royal families of medieval Europe.

It’s hard to break into their ranks just because you have money.

“Even though Jungwoo Group is a large company, it’s not a chaebol yet. While Chairman Park Dae-ho has a unique personality, there are no blood ties involved yet.”

Just because a company is big doesn’t automatically make it a chaebol.

Influenced heavily by Japan, many of our conglomerates resemble Japanese firms.

Of course, after World War II, the U.S. forcibly fragmented the Japanese chaebols into over a hundred companies.

In our case, those in power created chaebols in the midst of rapid growth.

Over time, the power of these conglomerates only grew; while military regimes fell, the chaebols endured.

“I understand. Let’s make it happen, but we need solid backing from the media and the IMF, as well as the President-elect’s endorsement.”

“Right. Let’s set the day after the inauguration as the deadline. That’s when the media’s planned exposé will hit.”

President Yoon nodded.

“Once the Prosecutors’ Office moves, foreign capital, including the IMF, will demand the dismantling of Jungwoo Group.”

This would pose an immense burden on the incoming government.

It would be the same as asking for the dismemberment of our companies and handing them over to foreign investors—a request they can hardly grant.

However, once the Prosecutors’ findings are made public, the government will find it hard to resist.

Better to let Han Gyeong-yeong take over than to fall prey to those hyena-like foreign hedge funds.

“The government will practically hand Jungwoo Group to you. Your role is crucial; this is all about timing.”

President Yoon didn’t respond but seemed lost in thought, rubbing his chin.

“This will benefit you too, especially after you step down as Prosecutor General. I’ll ensure your achievements are well-publicized.”

“Really?”

“You need to think about your future post-office. You’re still young enough to avoid going back to private life.”

President Yoon nodded and began asking for details about the plan.

* * *

At the same time that Kim Mu-hyeok was speaking with Pesident Yoon,

A car pulled up at the hotel where the transition team for President-elect Kim Hak-gwon was located.

The person stepping out was Chairman Park Dae-ho of Jungwoo Group.

“The President is waiting for you,”

“Is that so? Please lead the way.”

One of Kim Hak-gwon’s aides escorted Chairman Park Dae-ho to the top floor of the hotel to meet with the President-elect.

Discussing matters with his advisers, Kim Hak-gwon stood up to greet Chairman Park Dae-ho as he entered.

“It’s been a while, Chairman Park.”

“Congratulations on your election, sir.”

“Oh, please, it’s nothing special.”

They exchanged warm handshakes and took their seats.

“You all can step out now. Take the documents with you. We’ll continue this discussion later.”

“Yes, Mr. President.”

Chairman Park Dae-ho glanced at the pile of documents on the table, spotting the list of conglomerates, including Jungwoo Group.

Once the aides left, Kim Hak-gwon and Park Dae-ho began their conversation.

“Tell me, Chairman Park, I’m not well-versed in economics. My advisers are protesting vehemently against the demands from the IMF, claiming they are outrageous. What’s your take? Is it feasible without IMF assistance?”

The President-elect furrowed his brow, rubbing his temples as if he had a headache.

Park Dae-ho nodded.

“You’ll have to comply with the IMF’s demands. There’s a saying: if a nation isolates itself, it cannot survive. Even if you refuse, it may take a long time to overcome the current crisis.”

“Hmm…”

“But once you recover, what will be your stance? If you tear up the agreement with the IMF, what can Korea achieve on the international stage?”

“My advisers keep mentioning defaulting…”

“That’s impossible. We aren’t some African nation; we’re the 11th largest economy in the world. How can they suggest default?”

President Kim Hak-gwon looked at Chairman Park Dae-ho with a puzzled expression.

Chairman Park Dae-ho reacted strongly to the mention of default.

“Declaring a default for a country is entirely different from an individual declaring bankruptcy. If confidence in the nation erodes, who would invest in Korea? It’s unthinkable!”

“Haha.”

“The economic advisers don’t understand the realities. Businesspeople like me, who manage on the ground, will all oppose that idea.”

President Kim Hak-gwon sighed deeply, wearing a sheepish smile.

“So what should we do? Are we really going to hand over our economic sovereignty to the IMF?”

“We must accommodate their demands while repaying the funds we receive as quickly as possible.”

“I’ve received reports that companies are going bankrupt left and right. Not just large companies, but hundreds of small businesses are closing their doors every day.”

Since becoming the President-elect, he had received a massive amount of documentation from the current government.

This was the moment he truly grasped the dire reality of Korea, which he had been unaware of during his campaign.

“Our foreign reserves are running low. We need to repay debts, but we have no money. How did we end up in such a situation…?”

“This is all a scheme by countries like Japan and the U.S. They withdrew their investments all at once, causing a liquidity crisis.”

“Hmm…”

Park Dae-ho spoke with a slightly raised voice.

“Japan was particularly responsible for triggering this crisis. 40% of our debt was owed to them. Their harsh refusal to help us was a major setback. This is the current government’s failure.”

“That’s true, but…”

“You must not be shackled by the past. The actions of Japan against Korea are infuriating, but they are both a distant and close neighbor. We must create a reconciliatory atmosphere and encourage their investments in our country.”

Chairman Park Dae-ho’s words held truth.

If the Japanese government had acknowledged Korea’s requests, they wouldn’t have to endure the humiliation of the IMF demands, a reality that Kim Hak-gwon was well aware of.

“Ha… I understand. I’ll visit the U.S. and then stop by Japan to seek their investment.”

“That sounds like a good plan, sir.”

“And please stop calling me ‘sir.’ Do you know what I went through under the military regime?”

“Yes, Mr. President.”

“How is Jungwoo Group doing?”

“We’re holding strong. We were among the first to champion globalization, investing in various regions, including Eastern Europe. We’re not facing any major issues.”

“Are you sure? My advisers seem to think otherwise.”

Chairman Park Dae-ho laughed, feigning nonchalance.

“Haha, that’s just the ramblings of scholars who don’t understand real-world situations. There’s no such thing as a debt-free business. We’re simply facing temporary liquidity issues, which we’ll soon resolve.”

Kim Hak-gwon nodded at his words.

Chairman Park Dae-ho subtly shifted the topic.

“I’ve heard rumors that there will be a gold collection campaign targeting the public. Is that true?”

“Where did you hear that?”

“The rumors are running rampant in the business community.”

“Haha, it seems the bureaucrats really are the mouthpieces of the chaebols.”

Kim Hak-gwon sighed as he stared at Park Dae-ho, who wore a knowing smile.

“I need to gather some gold to sell. Nobody wants our currency, but they’ll buy gold, right?”

“Our Jungwoo will handle that matter,” he replied.

“Jungwoo Group?”

“Yes, we won’t leave any profit behind. Jungwoo will lead the gold export and bring in dollars for us.”

Seeing a hint of skepticism on Kim Hak-gwon’s face, Park Dae-ho added passionately,

“Jungwoo General Trading has branches all over the world. We can sell gold at great prices. Isn’t sales what I do best?”

“True, your reputation precedes you. I’ve heard tales of you selling ice in the Arctic!”

The trading company was a cornerstone of Korea’s growth, and among them, Jungwoo was legendary.

“Are you really suggesting we take on this without any gain?”

“Isn’t this a national crisis? Even big companies like mine need to step up.”

“Ha! If only all corporations were like you, we’d be in a better position!”

“The bankruptcies in big corporations will continue without public funds. The lack of dollars is a huge problem.”

“I hear Chairman Cheon’s door is getting a lot of traffic. Have you been there?”

“You mean Chairman Cheon from Cheon Tae-san?”

Kim Hak-gwon nodded.

“I’ve heard rumors, but it’s not urgent enough to resort to loan sharks yet.”

“Still, it’s true that there’s a lot of dollars over there. It shows how desperate big companies are right now.”

“Jungwoo is doing just fine, Mr. President.”

“That’s good to hear. You’ll be in charge of the gold collected from the campaign. While you won’t profit, you’ll receive tax benefits. Can you manage that?”

“Yes, Mr. President, I won’t let you down.”

“Once the IMF funds arrive, we’ll help the big companies get back on their feet. You need to wait; we can’t afford for them to fail.”

“Thank you, Mr. President.”

During his meeting with Kim Hak-gwon, Park Dae-ho managed to secure everything he aimed for.

Public funding and the rights to sell gold collected from the campaign.

Little did Kim Hak-gwon know how foolish this choice would turn out to be.

* * *

Days passed after the meeting with President Yoon.

The new year of 1998 was dawning.

“Grandfather, may you stay healthy this year!”

“Ha ha, that’s the plan!”

Grandfather had met with many CEOs over the past month.

Despite the stress, he seemed lively, clearly a man of the field.

“I’ve lent out all the dollars except for the ones in the basement. Most of the groups, including Daehyeon and Il-sung, have borrowed fromm me.”

“What were the terms?”

“Convertible bonds. Those who are cash-strapped need a way to operate. Il-sung is in electronics, Daehyeon in automobiles, and Geumsung in semiconductors.”

I nodded.

Grandfather continued,

“Most of what you suggested has been arranged. Make sure to get the documents from Myung-hoon later; converting them to stocks will be possible starting a year from now. The maturity is ten years.”

Grandfather was truly impressive. Although I had made the request, he secured more than I had hoped for through negotiation.

“By the way, aside from the convertible bonds, I’ve also secured the stocks of each subsidiary as collateral. Was that really necessary? They’re just collateral, after all. As long as they don’t collapse, it’s irrelevant.”

As grandfather said, the stocks held as collateral were of little value. Unless they went insane, no one would trade stocks for cash.

However, considering the unique cross-investment structure of Korean conglomerates, the situation changes. I intended to restrict voting rights through litigation on the stocks held as collateral.

“Thank you, Grandfather. You’ve been a great help.”

“Ha ha, it was entertaining! Watching the CEOs squirm as if fire were at their feet was quite the sight!”

Even disregarding the exchange rate of 2,000 won, getting dollars was a challenge.

I needed dollars urgently, but only Grandfather could provide them.

“How was Chairman Song?”

“Ha ha, do you think he’d grovel before me? He lent me some out of courtesy, but he’s quite the boring fellow.”

Chairman Song was in a much better position than others. While he couldn’t escape the liquidity crisis, his bet on Kim Hak-gwon ensured he had priority for public funds, allowing him to endure.

“It seems he’s considering joining the bidding for Asin Motors. Even now, he’s thinking of growing his company.”

I tried to dissuade him, but in the end, Song expressed his intent to participate in the bidding for Asin Motors.

From Il-sung to Daehyeon and eveen Jungwoo, the top three conglomerates all had their eyes on Asin Motors.

“Whoever acquires Asin will face the winner’s curse; this isn’t the right time to be expanding…”