Chapter 31
At that time, Daehyun was unbeatable, and the rivalry between Ilsung and Daehoo for second place in the business world ended in 1998 with the victory of Daehoo. Daehoo had at least applied the IMF's serious crisis as an opportunity by taking over Ssang-Ho Motors to expand their automobile business and expand overseas. Thus, the number of their corporations abroad reached nearly four hundred before the entire group was torn into pieces.
Unlike my paper companies that only existed in documents, their branches actually existed as companies. During this time, I was just a middle school student who was more interested in girls I met at cram school than Daehoo’s dissolution. I started recognizing Daehoo’s stature during university as my professor had worked for Daehoo as many others. He was a legal counsel and earned lots of money just with the research project Daehoo offered.
Obviously, the professor was biased toward Daehoo, and claimed that their dissolution was solely because of the government, not due to the IMF or inefficient corporate governance. He ardently believed that Daehoo’s breakup had led to Korea’s twenty-year delayed economic growth.
Well, he was not the only one. The conservative professors at my university who insisted the government should not intervene with conglomerates used Daehoo’s dissolution to attack the progressives. The funny thing was that it worked pretty well in reality.
***
“As I’ve told you, the first thing I did as a CEO was hiring two Korean directors,” Jamie said.
Yes, I remembered that they were executive directors of Samwoo Accountings and Kim & Park Law Firm.
“Cho Dae-Hwan and Park Chung-Sik,” I answered.
Jamie’s eyes widened as soon as I said their names. She was wondering how I could remember the names she mentioned once and would think that I was keeping eyes on Jeon-il.
She continued, “The reason why I hired them was their capability but also the uniqueness of this country.”
It was a good decision to hire Jamie since her brain functioned as smoothly as her seamless beauty. She found the answer to what Jeon-il needed the most. Instead of seeking a real estate investment counsel first, she prioritized thinking about how to safely manage the unidentifiable hot money that poured in Jeon-il.
As my decision on employing Jamie had led to a great result, the two men were the same for her.
“You know why I offered them the position of directors. It was not because of work.”
I remained silent to let her continue.
“But do you know what they are doing right now? They are engaging in politics. I gave them authority to at least pretend to work, but they’re dabbling in politics even though they’re not politicians,” Jamie said.
She said they had been meeting senior politicians.
She spoke before I was about to say something, “But I realized that this was how things are done here. I’m learning a lot from them, and thanks to them, I was able to put Daehoo on the list.”
“Jamie, let’s keep one thing in mind,” I interjected.
“Huh?” Jamie looked at me.
“Corruption exists in any country. North America legalized lobbying and made it public, but the basic rules are the same. I wonder if you can adapt to this country with that kind of bias,” I said.
Her excitement cooled down instantly, and her face became rigid.
“However, Korea is indeed unique since the word ‘conglomerates’ exists here. I apologize. Please continue on. My clients will also consider Daehoo on the list in a positive way, but the problem would be the undertaking funds,” I finished up.
Jamie seemed to be overwhelmed by my words and scratched her forehead to compose herself. Then, she opened her lips. The summary of her speech was that we should make Daehoo a victim of the IMF crisis. The current President and his cabinet needed something to avoid public criticism before the end of their term, and Daehoo was the perfect option.
As Jamie said, Cho Dae-Hwan and Park Chung-Sik were creating scenarios and writing the script by gathering politicians. Even if the government needed a scapegoat, would they be able to give up on Daehoo? Korean conglomerates had special power structures with a number of connections in both business and political fields. Sacrificing Daehoo would massively impact Korea.
There were so many politicians under Daehyun, Daehoo, and Ilsung around this time…Then, I remembered that the arrest warrant for Daehoo’s President had been issued, and the procedure must have been tough.
There must have been secrets that Cho Dae-Hwan and Park Chung-Sik couldn’t report to Jamie, and I held my thumbs up to them in my mind. I knew those two middle-aged men were something. How did they even think of attacking Daehoo at this time?
***
As I had mentioned before, the survival rate of the so-called upper financial and political elites was quite high in the Trial Tests. Their heads were filled with thoughts even in peace. They preyed on the weak for their profits, ensnared and disabled the stronger ones, gathered any equipment to survive no matter what, and used fear to defeat the others.
This cycle of survival and combat was repeated continuously. Park Chung-Sik and Cho Dae-Hwan used Jeon-il to gain secret favors and destroy Daehoo.
“The evidence the current government had on Daehoo was accepted by the court,” Jamie said.
I responded, “There will be a bloody massacre at the end of his term.”
The current government must have known this would be a rougher month than the one where they passed the real-name financial transaction system, but they did so anyway because they would gain larger benefits.
“What do they ask for?” I asked.
“Two things,” she replied.
“Additional investments and a block sale,” I said.
She continued, “Yes, they want at least five billion dollars of additional investment and the entire Daehoo Group, including their debts.”
Additional investments were not a problem. The funding routes would be unstable as it would come in a hurry, but the current government would deal with it and hide the transfers.
However, Jamie was observing my mood because taking the entire Daehoo Group was not very profitable. Although there were helpful subsidiaries, there were many insolvent affiliates. It was better to wait until Daehoo was completely split and gobble up the core elite affiliates for short-term money. Jamie seemed to be aware of this.
“Daehoo will be cleaned up even if we stop intervening. But it’s such a shame to let go of it like this,” Jamie said.
There was something she didn’t know. If we got out after things had gone this far, Jeon-il would become an enemy of the government. She seemed to think that there would be no threat because the term ended next month, but the next regime would be the Democrats. Also, when the financial crisis was resolved to a certain extent, a strong tax investigation would come to our company.
I started laughing. I wanted to make Cho Dae-Hwan and Park Chung-Sik kneel down in front of me while I applauded. It would take Jamie some time to grasp the flow of the Korean political and business worlds, but the two men didn’t need this. Both were experts but still chose Daehoo as prey.
.
The difference between the two men and Jamie was that Jamie had no knowledge about Korean conglomerates. The two directors were not looking at the assets or profits Daehoo’s subsidiaries were making. Instead, they tried to secure Daehoo’s position as one of the three major conglomerates in Korea’s business world. They were looking at the entire infrastructure and recognition Daehoo had built. Who would have even thought that Daehoo would be ruined around this time?
“Jamie, can you handle Daehoo? After we succeed in the acquisition, you are not thinking of bringing in professional managers from abroad, right?” I questioned.
Jamie didn’t answer as if I hit her mark.
“Find a new president from the current executives. Not from the CEO's family, but from his closest board members,” I added.
“...”
“You should have Cho Dae-Hwan and Park Chung-Sik stay close to you and learn a lot from them. They would know why I made this decision. Oh well, they would even demand this to happen in the first place,” I said.
It seemed like the three had already talked about this as Jamie’s pretty face hardened once more.
“Then, are you approving the acquisition of Daehoo?” Jamie asked.
“Just don’t be a doormat. We should be in an advantageous position. Hand over as many insolvent affiliates and Daehoo’s debt as possible to the government,” I said.
“The conditions that the government strongly demands are…” Jamie mumbled.
I led Jamie to come over the window, and she followed as I moved.
“Do you know what the government always talks about these days?” I asked.
Jamie’s gaze followed my fingers and to the street. People were lining up in front of the banks with gold rings in their hands. The Gold Collection Campaign banner was flapping in the cold wind.
“Share the pain. The necklace on you is gold, right?” I asked.
Jamie fumbled over her necklace.
“You will be noticed by the media in Gwanghwamun. Dress up luxuriously but not too much. Make up a story with your mother’s keepsake. Oh, bring your two directors with you,” I said.
Jamie was smart, so she knew what I was talking about.
“I know that I need justification,” she responded.
“And Jamie,” I said.
“Yes,” she replied.
“Don’t worry about additional investments or management direction, and proceed aggressively. Don’t let others take a single thing from us and grab everything you can find,” then I added, “Jeon-il Investments should monopolize Korea’s crisis. I gave you enough money for that. Don’t ever lose anything including lands, buildings, and companies.”