Butterfly's Dream (3)
Lee Jaseung offered no further specifics on method. He simply handed over the investment proposal and asked for a meeting with Chairman Han.
This was a matter that required the full weight of Hanyeong Auto Group behind it. The final decision rested with the Chairman alone.
And so the documents reached Chairman Han.
Hanyeong Auto Group
FX Risk Management
Discretionary Operation Proposal
In times of extreme exchange-rate volatility like these, an internal finance team alone could never keep pace. What was needed was round-the-clock monitoring by professional traders.
On the surface it looked like an ordinary FX-hedge mandate proposal.
“On paper it’s flawless. In reality it would be pure currency speculation. Juhyeong, are you telling me to accept this?”
Han Juhyeong, who already knew the contents, flinched.
“Father, just trust us this once. A twenty-percent depreciation scenario is beyond anything our finance team can handle. We need specialists.”
“And Makers is that specialist?”
This, at least, he could answer with absolute confidence.
“They are. Jaseung’s short game is pure genius!”
“……”
Genius was one word for it.
The problem was that he kept driving things to the absolute cliff edge with twist after twist.
“Isn’t it too dangerous? Mr. Lee has a habit of pushing everything to the limit. One misstep and the entire Hanyeong Auto Group could stagger.”
“But the risk never actually blows up, does it?”
Chairman Han stared at his son with an incredulous expression. Han Juhyeong remained unshakably bold.
“If the risk never materializes, then it’s safe.”
“……”
Smack!
“Ow! Why’d you hit me? In the end everything succeeded, didn’t it?”
Even Chairman Han had to concede Lee Jaseung’s ability.
He had been watching the young man carefully ever since the Yuseong Steel acquisition battle.
Looking at recent moves, Jaseung was growing at a terrifying pace.
He’s never failed once.
Whether investment or consulting, every project Makers took on had been driven to success.
Cunning yet bold. He even forced the Seonkang Group chairman to back down with exactly the right amount of pressure—no more, no less.
He looked like a gambler making reckless bets, yet every single move, under scrutiny, was meticulously calculated.
Chairman Han read through the proposal once more.
The yen falls twenty percent.
Hanyeong Auto’s strategic planning office had already reviewed the scenario.
Twenty percent is extreme, but not impossible. In the worst case Hanyeong would face roughly eight hundred billion won in operating losses.
The conclusion was simple.
We have to prepare.
In principle companies keep operating activities and financial activities strictly separate.
But how separate could they really be?
Export-oriented firms were especially sensitive to economic swings and policy shifts. In downturns, covering weak results with financial gains was the unspoken industry custom.
And the most important point of all:
I’m tempted.
Succession.
Because the proposal had put its finger precisely on Chairman Han’s greatest concern.
He tapped the document Lee Jaseung had sent, let out a long sigh, then—unusually—laid his true thoughts bare.
“Juhyeong, if you could take charge of the Xenon Project, nothing would make me happier. That project is Hanyeong Auto’s future—and yours.”
“Father……”
Han Juhyeong couldn’t speak for a moment. It was the first time his father had ever voiced such direct expectation.
“Ever since you took over Hanyeong Steel, you’ve finally earned the trust of the executive team. You improved results and stabilized the organization. You’ve made up for past failures and at last taken a proper first step.”
Chairman Han paused and looked at his son.
“If you take the lead in overcoming this yen crisis, it will mean far more than simply defending the numbers. You’ll be demonstrating genuine crisis-management leadership. That will naturally create the justification for you to move on to the Xenon Project.”
Lee Jaseung’s succession-consulting direction had been correct all along.
If things unfolded exactly this way, Han Juhyeong could ride the fastest possible track into Hanyeong Auto.
And with Mr. Lee at his side, I’ll feel safer too.
“If you take operational command of the Xenon Project and Mr. Lee serves as advisor, you can drive it without trouble. You’ll learn a great deal in the process.”
Han Juhyeong felt an unexpected lump in his throat. The father he had always believed doubted him had been wrestling with so many concerns.
Then Chairman Han’s expression hardened again.
“But listen carefully. Mr. Lee’s investment style is far too dangerous. Even if we call it an external mandate, failure will give people something to seize on. If you stand at the vanguard of crisis management, every scrap of responsibility will fall on you.”
Risking everything merely to defend against losses made no economic sense.
Still, the idea of putting Han Juhyeong forward as a crisis-management leader looked attractive.
Then Han Juhyeong spoke carefully.
“Oh—right. There’s something I forgot to mention.”
“Hmm?”
“He said that if we take a short position we can neutralize Satonomics pol—”
Smack!
“Keh!”
Chairman Han clutched the back of his head.
“Why are you only telling me this now?! Get Mr. Lee here immediately!”
Lee Jaseung thought.
Chairman Han isn’t the conservative type. He’s a gambler at heart. Once he decides, the audit committee won’t even register.
If an agenda reflected the Chairman’s will, there were any number of ways to push it through formally.
The only real problem was whether the Chairman himself felt the numbers didn’t add up.
Jaseung already understood the core issue.
Defending against losses is nothing more than maintaining the status quo.
There was no reason to take risk merely to stay in place.
Chairman Han needed a stronger motive than that.
That motive was the neutralization of Satonomics.
Jaseung chose his words carefully and spoke.
“If Satonomics is implemented, it will work against Hanyeong Auto Group over the long term.”
Curiosity flickered across Chairman Han’s face.
That was exactly why he had wanted this meeting—to understand what this was about.
“But one can hardly stop a policy enacted by another country, can one?”
“We may not be able to stop it, but we can certainly throw a wrench into the works.”
At those words Chairman Han and Han Juhyeong’s eyes met.
What on earth is he talking about?
Throw a wrench into it?
Jaseung addressed the two now fully attentive men.
“Must we only defend? If the short becomes the trend, why not use that trend and approach aggressively?”
“Approach aggressively?”
“We break their momentum from the very start of the policy and force them onto the back foot.”
Chairman Han felt a strange pull, as though he were being drawn in.
Ordinarily he was not easily swayed by anyone’s words, yet a strategy this bold stirred his curiosity.
“How exactly do you propose to break their momentum?”
“As you know, everyone already expects yen weakness. The yen short will become the trend.”
Jaseung recalled what he had already confirmed in the future.
The moment Satonomics was announced, yen short positions had hit one hundred billion dollars.
Exactly like a theme stock.
The yen short would transform into a trend that every player in the financial world would join.
Chairman Han nodded.
“I’m aware. To some extent the Japanese government intends it. They want to lure speculative capital in to drive the yen’s value down, don’t they?”
“Yes. It’s a deliberately engineered trend. And I intend to turn that trend into a frenzy.”
From short trend to short frenzy.
What would happen then?
“Let’s drive the yen even lower.”
Han Juhyeong, sitting beside them, cut in.
“Hold on. If the yen falls further, doesn’t that hurt us even more?”
“True. But Japan will hurt as well. Every policy has an optimal line—just enough to revive exporters, just enough to cure deflation. What happens if we punch through that optimal line?”
“Side effects appear.”
Jaseung gave a small affirming nod.
“We can’t be the only ones who suffer. If we’re going to suffer anyway, then both of us should suffer.”
“……”
Han Juhyeong was speechless.
This was the mentality of a man who refused to fall into hell alone—so he grabbed the other guy by the hair and dragged him down too.
This bastard’s moved on from tormenting people to tormenting neighboring countries.
After Lee Jaseung left, Chairman Han thought to himself.
His guts are no ordinary thing.
For more than thirty years of running a company he had weathered countless economic crises and exchange-rate shocks.
The 1997 foreign-exchange crisis, the 2008 financial crisis, and now Satonomics.
Throughout all of them Hanyeong Group had always taken a defensive posture.
There had been no other choice.
No normal person even contemplates throwing sand in the gears of another nation’s policy!
Yet Lee Jaseung was radical.
Japan’s Satonomics was clearly disadvantageous to Korean companies.
The conventional wisdom had always been “We can’t change a situation that hurts us, so let’s minimize the damage.” Jaseung’s thinking was different.
Make the other side suffer right along with us!
Most astonishing of all was how realistic the strategy was.
It was not some absurd proposal to pour money into manipulating the foreign-exchange market.
They lacked the capital for that in any case, and even attempting it would only produce a wasteful dispute with Japan.
But if we simply accelerate a trend that will form anyway? If we add just a little more capital so the yen falls farther? If that causes the Japanese government to lose control over the yen?
As he sketched the scenario in his mind, Chairman Han finally could not hold back and burst into laughter.
“Heh heh heh.”
It was truly breathtaking.
When he had thought of it merely as defending operating losses, he had hesitated.
After all, taking dangerous risks simply to protect against losses made no economic sense.
But if they were only resting a hand on a trend that would form regardless?
It was the same as riding a wind that was already blowing.
Suddenly the proposition felt quite profitable.
It’s absurd.
He could feel that Lee Jaseung had deliberately reframed the entire issue.
Yet even knowing the intention, he had no choice but to follow.
Because he was drawn in.
As a gambler. As a businessman.
His instincts were captivated by this aggressive strategy.
If this succeeds, the gains will be enormous.
Defend short-term operating losses with financial profits.
Break the momentum of Japanese policy.
And if Han Juhyeong demonstrates leadership throughout the process, Hanyeong Auto’s stature rises.
Profitability, export competitiveness, succession.
Perfect on every front.
Chairman Han solidified his resolve.
“We’re investing.”
Han Juhyeong asked in surprise.
“Really?”
“Yes. We’ll go with Mr. Lee’s plan. Form a group-level task force and sign a discretionary investment contract with Makers.”
Corporations are conservative. Audit committees, boards of directors, and investment review committees do not exist for nothing.
But that was only half the truth.
Once the chairman decides, there are any number of ways to route around those constraints.
Custom products that embed leverage, SPCs that layer on additional leverage—methods for raising effective leverage without recording it on official documents were countless.
Han Juhyeong asked,
“Father, how much are you planning to invest?”
“We’ll have to put in three hundred billion at least.”
Han Juhyeong muttered with an incredulous face.
“When I do it you call it gambling, but when Father—”
Smack!
Han Juhyeong clutched the back of his head.
※ This work is a work of fiction. All characters, groups, place names, and events appearing within the work are fictitious and bear no relation to anything existing in reality. Specialized knowledge described herein has also been reconstructed and adapted to suit the story and may differ from actual information.