Chapter 34
Chapter 34
Translation: Godtl
A market capitalization of 20 trillion won.
This was only the combined total of publicly listed companies—if unlisted subsidiaries were included, the scale would be even larger.
LK Group owned South Korea's top-ranking hotel subsidiary and generated substantial revenue through its retail businesses, including department stores and duty-free shops.
Particularly, its flagship LK Hotel was not publicly listed.
"There was some noise during LK Group's succession process, but nothing substantial came of it. Contrary to concerns, President Oh Jae-hyun, the second son, smoothly accepted the succession plan. It seems Vice Chairman Oh Seung-hyun, the eldest son, will assume the chairman's position early next year."
The biggest obstacle hindering the growth of Korea's stock market.
Was precisely this—succession.
As if the heavens would split in two if they didn't hand over management rights and the company to their own bloodline, they acted as though it were a matter of royal succession rather than corporate governance.
The problem was that even shareholders took this kind of succession for granted.
While overseas, the culture of passing down management rights to one's children is nearly nonexistent, Korea uniquely clings to this practice so strongly that foreign investors view it as owner risk.
This very reason is why foreign investors hesitate to park their money in Korea for the long term.
Instead of nurturing companies through proven professional managers, they readily hand over control to the eldest son—whose management skills remain unverified—solely because he shares their blood.
"It's an unavoidable reality. In Korea, it's actually seen as strange if you don't pass the business to your children. Foreigners even find our culture fascinating. They're amazed that shareholders don't sue over stock buybacks or price drops during succession."
Even if lawsuits were filed, they'd be unwinnable battles.
The U.S. builds shareholder-centric companies, while Korea builds strictly owner-centric ones.
That was the fundamental difference between domestic and overseas markets.
"So, there are no significant issues concerning LK Group?"
"Correct. The succession process is complete. And LK Tower is set for completion next year, isn't it? Ah—though there were some funding issues during its construction. But since there's been no further talk, it seems they resolved it well."
Looking into LK Group's structure, it followed the same circular shareholding model as other Korean conglomerates. That is, they created hundreds of interlocking ownership loops, allowing them to control the entire group with minimal actual equity.
Likely, even within LK Group, only a handful knew just how tangled these loops were—or how to carefully unravel them. If mishandled, these loops could knot up, destabilizing the entire ownership structure.
This was precisely why the succession process had been so complicated.
And digging deeper into LK Group revealed another layer.
"LK Group currently controls all its subsidiaries through LK Trading. But above LK Trading, there's another holding company."
"This Japanese holding company listed here?"
"Yes. LK's roots trace back to Japan. Since LK Orient controls LK Trading, the true owner is effectively the Japanese side."
Given that LK originated in Japan before expanding into Korea, this was perhaps inevitable.
"Though many Koreans don't realize it. Plenty think LK is purely a domestic company. Well, since Koreans are the ones running it now, I suppose that's fair."
"But the more I look at this circular shareholding, the more fascinating—and incredibly convoluted—it gets."
Controlling an entire empire with minimal equity through countless interlocking loops.
Honestly, whose idea was this?
"Yes. Some European companies also use circular shareholding, but the difference is they completely separate ownership and management. Korean firms try to do both simultaneously, making the structure far more complex."
And among Korean companies, LK Group had the most intricate and numerous ownership loops.
"But Chief, why the sudden interest in LK Group...?"
"Ah, just curiosity. There was an article about the succession process wrapping up."
The reason I became interested in LK Group was because of an overwhelming sensation that struck me while touring the LK Tower model house that day.
And it was precisely because of this article.
'I can still feel it now.'
An interview where Oh Jae-hyun, the second son of Chairman Oh Dong-young, stated he would assist his elder brother Oh Seung-hyun in successfully growing LK Group.
That was when an intense tremor ran through me.
Why?
Why, out of all the articles, did this one trigger such a feeling?
Then, a sudden thought struck me.
'What if President Oh Jae-hyun is lying?'
I searched for other articles as well.
The ones featuring interviews where President Oh Jae-hyun vowed to help his elder brother stabilize the company.
Sure enough.
Only those specific articles made my instincts stir.
"Section Chief Seo. You don't think these two brothers are fighting over shares, do you?"
"Didn't President Oh Jae-hyun say in his interview that he has no interest in the chairman's position?"
"Yes. But you know what they say—those who claim to have no interest in money are often the most obsessed with it."
"You mean... you suspect President Oh Jae-hyun is lying?"
"After looking through the articles, President Oh Jae-hyun seems to have outperformed Vice Chairman Oh Seung-hyun in multiple areas. Don't you think he might believe he's more capable than his brother?"
Section Chief Seo nodded slowly.
"Honestly, as humans, claiming to have zero interest in the chairman's position would be a lie. But Chairman Oh Dong-young has already finalized the succession plan in favor of his eldest son, and the process is nearly complete. What could President Oh Jae-hyun possibly do at this point?"
On the surface, Section Chief Seo was right.
But every time I read an article about President Oh Jae-hyun, my intuition kept sending me signals.
That could only mean one thing—something was brewing.
"Section Chief Seo, could you ask the research team to dig deeper into LK Group's ownership structure? Especially regarding LK Orient, the one based in Japan?"
"Ah, yes. I'll look into it right away."
I was already aware that the internal succession process was finalized, leaving President Oh Jae-hyun with no opportunity. But there had to be a clear reason why my instincts were reacting this way.
It could very well be President Oh Jae-hyun's coup—or perhaps something else entirely.
"Or maybe not."
As long as the shoddy construction of the LK Tower I invested in doesn't collapse.
＊＊＊
Ever since I was young, my father would repeat the same words to me.
You must help your brother lead this company well.
Always follow your brother's lead.
If your brother sets his mind to something, support him with all your might.
Brother, brother, brother!
To my father, only the eldest son existed.
Yet, I worked tirelessly in the company, clinging to the hope that maybe, just once, he would acknowledge me.
The bloodline of an owner.
The second son, already pushed out of succession.
I lived my entire life with that label, hiding my ambitions while standing where my father's gaze could reach.
But the answer was always the same.
"Help your brother. This company belongs to him."
That was when I realized.
My father will never look at me.
This company was always meant for the eldest son, from beginning to end.
No matter how hard I struggled, no matter how much I proved my competence, my father's eyes would never see beyond his firstborn.
Then, only one path remained for me.
Just like Yi Bang-won, who drew his sword to drive out his own father and brothers before claiming the throne—I, too, had no choice but to do the same.
"President, we've arrived."
President Oh Jae-hyun opened his closed eyes.
Before stepping out of the car and entering where the shareholders awaited, he paused and took a deep breath.
The moment I open this door and step inside...
There's no turning back.
I will have to sever all ties—with my father, my brother, and the entire LK family.
Is this truly worth it?
"..."
His hesitation didn't last long.
Without another moment of doubt, President Oh Jae-hyun pushed the door open and stepped inside.
＊＊＊
There is a man known as the father of short selling.
George Soros.
A man whose very name sounds like "short," he famously predicted the collapse of the British pound and shorted a staggering $10 billion.
$10 billion.
That's over 14 trillion won in our currency.
By today's standards, that figure might seem modest, but back in the 90s, it held far greater value.
The profit gained from shorting 100 billion dollars and forcing the British government to wave the white flag was 1 billion dollars.
Just 1 billion dollars?
One might say that, but that's how shorting works.
While going long means profiting based on how much the price rises, shorting means profiting based on how much it falls.
Moreover, the larger the capital involved, even the slightest volatility can generate massive profits, making it impossible to hold the position for long.
Even if you're certain the price will drop, if it traces a curve instead, the resulting margin call will blow up your position.
And there's one more crucial point.
The 1 billion dollar profit from investing 100 billion dollars was realized in just a single day.
"But isn't our team leader the Korean George Soros?"
"What nonsense. George Soros wouldn't even hold a candle to our team leader. Where in the world would you find someone as skilled in investments as him?"
George Soros shook the British government with his massive short selling, leading to new legislation.
Regulations were particularly tightened on hedge funds that frequently engaged in short selling, and safeguards were put in place to prevent major damages caused by them.
But even with such regulations in place—
The moment blood is spilled and the prey stumbles, starving hyenas will pounce like wolves.
Those regulations and laws couldn't possibly protect a fallen prey.
"Given that the funds are highly dispersed and considering the hefty fees from using fund and securities lending services, the estimated amount we can currently account for is approximately..."
Assistant Manager An Yeong-sang's voice trembled slightly as he delivered his report.
"1 trillion won."
"Wow..."
"1 trillion?!"
We've finally graduated from the hundred-million club and joined the trillion-won league.
1 trillion won.
It's an enormous sum, but in the world of investment, it's not that significant.
Just look at KS, our country's largest financial group—they handle over 300 trillion won in funds alone.
And if we consider the global scale, even 300 trillion won becomes small change.
The world's top asset management firm, Whiterock, manages a staggering 4.7 trillion dollars—equivalent to 5,600 trillion won in our currency.
Closer to home, even our National Pension Service handles over 500 trillion won.
Of course, the common factor here is that these aren't corporate funds but clients' money.
But even if it's clients' money, funds operate based on their own investment strategies, making their influence impossible to ignore.
So in a way, it's motivating.
Looking at these corporate giants far above my level, I can't help but aspire to reach those heights someday.
"As expected of our team leader... Your ambitions are truly staggering."
"KS handles over 300 trillion won, but most of that is clients' money. If we're talking about corporate capital alone, 300 trillion would put them on par with Kangsung Electronics, wouldn't it?"
"Kangsung Electronics is worth over 500 trillion."
"That's when you account for all their assets. If we're just talking cash reserves, even Kangsung Electronics only has about 100 trillion."
"Hah. 'Only' 100 trillion? Since when did we lose all sense of monetary scale?"
There's a saying: Aim for the sun when you throw your spear.
It means that if you aim for the sun when throwing a spear, it will fly farther than usual.
In other words, the bigger your goal, the better.
"Ah, Team Leader. Here's the data you requested earlier."
"LK Group?"
"Yes."
According to the research team's findings, Korea's LK Group was effectively controlled by LK Orient, based in Japan.
And LK Orient is currently unlisted.
To solidify control, the founding chairman established LK Orient as a private company and then distributed its shares among allies.
"To acquire those shares, we'd have to engage in over-the-counter trading, but there aren't many sellers available. Even if there were, it'd be hard to gain a casting vote. The friendly shares aligned with Chairman Oh Dong-young are overwhelmingly dominant."
I examined the currently available LK Group stocks.
No matter how many Korean shares we buy, unless we secure LK Orient's shares, we'll never gain control of LK Group.
In other words, the key lies in the shares tied to LK Orient—
"Hmm?"
As I ran my pen down the list, my hand suddenly stopped at one particular entry.
'JK Holdings?'
JK Holdings had recently put up a single item for over-the-counter trading.
It was their stake in an industrial holding company—one that offered minimal dividends and wasn't even publicly listed, meaning there was little chance of its value rising.
The 17% stake they were offering in this industrial holding company amounted to a staggering 300 billion won in our currency.
At first glance, it seemed like a worthless asset—something so devoid of value that it couldn't even go public.
The fact that no one had shown interest in buying it, despite it being on the market for quite some time, spoke volumes.
"..."
Yet my hand remained frozen, refusing to move past it.
Thud—
As if confirming that this was exactly what I'd been searching for, I pressed down so hard with my pen that it nearly tore through the paper.
＊＊＊
Stumbagen's stock price had plummeted by over 30% due to the Dieselgate scandal.
With multiple countries slapping them with hefty fines, Stumbagen was gasping for breath, and rumors of bankruptcy began circulating. Eventually, the German government stepped in, realizing things couldn't continue like this.
If Stumbagen failed to recover, the companies tied to it would collapse one after another, dealing a severe blow to the German economy.
And it wasn't just Germany.
The same applied to Europe as a whole.
"If we'd pulled our money out just a little later, we might've lost nearly a trillion won."
"Right. They say the arm bends inward, after all."
"The German government couldn't possibly let Stumbagen collapse like this."
Stumbagen's stock, which had been in freefall, finally began to recover.
The one saving grace was that, following Section Chief Jeong Jin-ho's instructions, we had already withdrawn all our funds.
"Did the Section Chief predict that the German government would bail out Stumbagen?"
"Of course. While we're busy calculating one move ahead, he's already ten steps ahead. The timing of his sell-offs is nothing short of miraculous."
But right after hastily withdrawing the funds, the very next investment he executed was an over-the-counter trade.
And not just any trade—it involved buying a stake in a company based in Japan.
"Don't over-the-counter trades usually take a while? The fact that they sold it the moment we offered to buy suggests they were desperate to offload it as quickly as possible."
An over-the-counter trade requires a platform.
Securities firms act as intermediaries, taking a listing fee in exchange for advertising the sale.
JK Holdings had entrusted their stake to KS Securities, the largest brokerage in Korea, in hopes of selling it.
And it was Section Chief Seo who brought it in, following Section Chief Jeong's orders.
"But why would he buy this...?"
"An industrial holding company? Where even is that? I've never heard of it."
"Not to mention it barely pays dividends and isn't even publicly listed..."
How could a sparrow ever understand the will of a phoenix?
But this time, I genuinely had no idea.
Why on earth would the Section Chief spend 300 billion won on something like this?
[Breaking news just in.]
At that moment, the financial news playing in the office was interrupted as the anchor announced a breaking update.
[LK Orient has convened a board meeting and announced its decision to remove Oh Seung-hyun, the current Vice Chairman of LK Group, from his position as representative, replacing him with President Oh Jae-hyun. As the holding company that controls LK Group, a change in leadership here effectively means a shift in control over LK Group's...]
"Huh? What's this about? A sudden dismissal?"
"Turn it up. Wasn't the succession plan for LK Group already settled? Why would they hand the position to the second son out of nowhere?"
To summarize the news:
Oh Jae-hyun, the second son, had thrown ashes into a perfectly cooked meal—declaring that he would take the chairman's seat for himself.
What the... Just as the Section Chief said, Oh Jae-hyun was lying all along.
As he watched the news, Section Chief Seo felt chills run down his spine.
Oh Jae-hyun's claims about helping his older brother grow the group had all been lies.
Instead, he had orchestrated a surprise board meeting to oust his brother from the representative position, maneuvering himself into power to seize control of the group.
"So President Oh Jae-hyun just stabbed his father and brother in the back?"
"Exactly. He pushed out his own father and brother."
"Wow. This isn't some movie—it's real life?"
The moment had arrived.
The War of Princes within LK Group had begun.