The Second Strike
Yoo Jae-won considered every possible category that would hurt Ilseong the most—scandals, corruption tips, slush funds—but none of them truly satisfied him. Even if a scandal engulfed the entire world, Chairman Choi Hyun-hee would feel no shame, and any report of corruption or hidden funds would likely result in nothing more than a slap on the wrist in court. Although Kim & Jung Law Firm had been quietly informing judges and prosecutors of new avenues for action, the cartel they had spent decades building would not collapse overnight.
“In the end, it always comes down to money. For people who worship nothing but wealth, the best way to crush them is with money itself.”
Yoo Jae-won saw the essence of the ID Investment smear campaign as a financial problem. Capital was pouring into ID Investment at an alarming rate. Deposits had already surpassed the trillion-won mark. Meanwhile, foot traffic at traditional securities firms had been cut in half. In a world where a few percentage points in returns separated fortune from ruin, it was only natural that investors would flock to ID Investment after it delivered over 100 percent gains. The existing financial groups must have been deeply unsettled, and that unease had ultimately triggered this absurd incident.
“How much capital do we have available right now?”
Yoo Jae-won opened the ID Investment management program. While it did not provide real-time monitoring, he could instantly check the rough scale of their holdings.
“That’s quite a lot.”
The words sounded strange even coming from someone who had handled hundreds of millions. The thirty billion dollars invested in Nikkei futures were not permanently locked into a single product. Futures expired every three months and options every month, so positions had to be rolled over regularly. Through precise trading during these cycles, ID Investment’s balance had snowballed. It had already exceeded ten billion dollars, so Yoo Jae-won’s reaction was understandable.
“Hmm? Ten billion? Twenty billion?”
While maintaining the original scale of the Nikkei investment, he calculated how much capital could be mobilized inside Korea.
“Let’s go with twenty billion. When you spend, you might as well spend big enough to leave an impression.”
After finishing his calculations, Yoo Jae-won immediately contacted Vincent Greenhill.
The next day.
Even though ID Investment was an investment bank founded with Korean capital, it had until now focused almost exclusively on overseas investments. Its sudden announcement that it would expand investments into Korean blue-chip companies drew immediate attention.
Vice President Vincent Greenhill held a press conference yesterday and declared that ID Investment would inject a massive 2 billion U.S. dollars—1.44 trillion Korean won—into new investments in Korea. Rather than following the Japanese model of index futures, the firm would target undervalued blue-chip stocks. Vice President Greenhill stated that he had become interested in Korea’s globally undervalued stock market, but the recent smear campaign against ID Investment was clearly another major factor. Whether the ID Investment myth could continue in Korea as well remained to be seen.
Yoo Jae-won read the entire ID Investment article on the Nextcom news page. Although he had to leave for the airport in ten minutes to catch his flight to Korea, he remained focused on work until the very moment he stood up.
“A rather sharp piece.”
Still, the reporter had missed the mark. The 2 billion dollars were not meant for buying undervalued blue chips—they were Yoo Jae-won’s retribution against Ilseong for the smear campaign. He intended to use most of that capital to aggressively purchase shares in Ilseong’s major subsidiaries: Ilseong Electronics, Ilseong Trading, Ilseong Construction, and Jeil Textiles. His goal was to secure enough stakes to place at least one director on each company’s board and pressure them into undergoing audits based on global standards.
Of course, he would not need the entire 2 billion dollars to accomplish this. Ilseong Electronics, the flagship of the group, was currently trading at around 20,000 won per share—half the 40,000 won it had fetched in the 1990s, thanks to Mirae Group’s aggressive new semiconductor plants. The situation was similar across other subsidiaries. Unlike in his previous life, Mirae Group’s affiliates had seen sharp rises in stock prices, while Ilseong’s companies remained sluggish. Therefore, acquiring the targeted 10 percent stakes would not require the full 2 billion dollars.
Yet he had deliberately announced the full amount to give Chairman Choi Hyun-hee nightmares.
“I’ll make succession difficult for you as well.”
Chairman Choi Hyun-hee’s greatest concern remained succession. He had only barely secured recognition as Ilseong’s owner through various loopholes, and because his control had been built on such shaky ground, passing it on to the next generation was proving equally difficult. Preparations for third-generation succession had already begun the moment Choi Hyun-hee took the chairman’s seat. Yoo Jae-won planned to use his massive shareholdings to weaken not only the third-generation succession but also Choi Hyun-hee’s own grip on power.
This was Yoo Jae-won’s first counterstrike. If Ilseong disliked being checked in this manner, they could always solve it with money. The shares ID Investment had purchased were legitimate investments; if Ilseong offered a significantly higher price, Yoo Jae-won was perfectly willing to sell. He would gladly return them for roughly ten times the purchase price. Of course, he did not expect Choi Hyun-hee to buy the shares back. After all, this was the same man who had devised every conceivable loophole to avoid inheritance taxes.
“Chairman, it’s time to depart.”
“Already?”
The computer clock showed that departure time had indeed arrived. A brief moment of distraction had made the hours vanish in an instant. Yoo Jae-won shut down the computer and rose from his seat. His steps felt light. After all, the second counterstrike—delivering 100 percent interest—would be launched in Korea, making the flight home more exciting than ever.
March 20th.
The plane carrying Yoo Jae-won and his entourage landed at Gimpo International Airport. Having purchased first-class tickets, they were entitled to disembark first. The service was simply part of the vastly different experience that came with the ticket price. This time, however, they would not be receiving that service.
It was not a problem with the aircraft.
“Chairman, we may need to wait about ten minutes.”
Kim Dae-seok, who had gone ahead and returned, spoke while beads of sweat trickled down his face. Although it was late March and the weather had warmed, it was not hot enough to cause perspiration—yet his forehead was dotted with sweat.
“Understood.”
Yoo Jae-won nodded at Kim Dae-seok’s words. The reason was obvious: a loud, swelling murmur was coming from the arrivals hall. It was a clear signal that an enormous crowd had gathered. Yoo Jae-won already had a rough idea of what was happening.
Was this Honorary Chairman Jeon Myeong-heon’s doing? He doubted it. Election rallies were held in streets and plazas filled with voters, not inside airports.
“Not only your fan club, but reporters are swarming as well. There are also a tremendous number of Tongil National Party supporters.”
Kim Dae-seok’s follow-up shattered Yoo Jae-won’s expectations. A fan club? He was not an idol singer. Although he lived with Nextcom constantly at his side, this was the first he had heard of his own fan club being formed. Reporters were to be expected whenever there was a story, but he had never imagined that Tongil National Party supporters would turn out in such numbers. In any case, it confirmed that Honorary Chairman Jeon Myeong-heon was a man who could not be judged by ordinary standards.
“Airport staff are still trying to clear the area. I’m not sure if they’ll finish within ten minutes. Also, after immigration, it seems you’ll need to hold a brief press conference.”
“Of course we should.”
While it would be troublesome if this became a regular occurrence, Yoo Jae-won had always wanted to experience a grand press conference upon returning to Korea. He decided to wait by reading a newspaper until the area was prepared.
There were quite a few breaking stories he had not seen the day before. The moment he opened the paper, one front-page headline caught his eye.
The fiery Honorary Chairman Jeon Myeong-heon had finally mentioned chaebol dissolution. Yoo Jae-won had wondered whether his support might push the candidate that far, and indeed, Jeon Myeong-heon’s personality had not changed. Having already achieved everything he set out to accomplish, the honorary chairman clearly felt he had nothing left to lose.
Jeon Myeong-heon had been born in Tongcheon, Gangwon Province—now part of North Korea—as the son of a poor tenant farmer. In his late teens, he had come down to Seoul with the money from selling his father’s cow and built the Mirae Group from nothing. In contrast, the founders of other chaebols, including Ilseong, were mostly large landowners or individuals who had received Japanese colonial assets at favorable prices. Even Busan Group President Park Sang-kwon’s rice bran oil factory had originated from Showa Beer, which had been sold off after liberation. Among the first-generation chaebol founders, only Honorary Chairman Jeon Myeong-heon was a true self-made man from the lowest rung of society.
Although he had now built an enormous enterprise that would make second place feel humiliating, his thoughts about his origins had never changed. That was why he could bring up chaebol dissolution for the sake of his grand presidential ambition. Thanks to this disposition, he had readily agreed to the request Yoo Jae-won had made the previous day.
Yoo Jae-won had asked him to add one more pledge to the already lengthy list of Tongil National Party promises. From Jeon Myeong-heon’s perspective, it was merely placing one additional small stone on an already massive cairn, so approval had come easily. Yet the request was far from trivial. It concerned strengthening regulations on the issuance of convertible bonds.
At the same time, this was Yoo Jae-won’s second counterstrike against the Ilseong Group.
Convertible bonds—commonly known as CBs—were instruments ordinary people rarely encountered, but they were no strangers to corporate executives. When running a company, there were frequent occasions when large sums were needed for major projects. While borrowing from banks was the standard method of raising capital, many companies found bank doors difficult to open. Those firms borrowed at higher interest rates by issuing corporate bonds. To make the bonds more attractive to investors, companies sometimes offered the right to convert the debt into company stock instead of repaying in cash. For investors, receiving convertible bonds from a company whose value was expected to rise was far more advantageous. For the company, it meant transforming a liability on the balance sheet into equity.
Ilseong had made excellent use of convertible bonds—specifically for succession planning. They issued convertible bonds and passed them only to Chairman Choi Hyun-hee’s children. When the bonds matured, the shares were transferred at a fraction of their value, completing the succession. Only after Ilseong carried out this process did related laws finally emerge to regulate it, but by then the big fish had already escaped. The heir who received a conglomerate worth hundreds of trillions of won paid only a few billion won in taxes. With an inheritance tax rate of 50 percent—the highest bracket—he should have paid well over 100 trillion won, yet the bill had been settled for mere billions.
Yoo Jae-won intended to block this method at the source so it could never be used again. While he hammered the board of directors—the mainstream of corporate governance—through equity investments, he would use legislation to shut down the underground succession schemes conducted through convertible bonds. That was Yoo Jae-won’s response to the ID Investment smear campaign.
He also felt a twinge of regret. Compared to the dirty tricks Ilseong had employed, his own methods felt almost too refined. Still, for Ilseong, both attacks would be devastating blows.
“Chairman, preparations are complete.”
“Ah, already?”
At Kim Dae-seok’s words, Yoo Jae-won folded the newspaper and stood up, straightening his clothes. Because he wore a suit to appear older than his actual age and maintained a regent-cut hairstyle, there were many details to attend to. With Kim Dae-seok’s help, he finished his preparations and descended the stairs to the first floor. The plane they had taken from the United States was a Boeing 747 jumbo jet, so first class was located on the upper deck.
Upon reaching the lower level, several flight attendants in crisp uniforms who had been gathered together straightened into formation upon seeing Yoo Jae-won’s party. They bowed deeply and wished him a pleasant journey. Such formalities always made Yoo Jae-won uncomfortable, so he returned the bow and quickly exited the aircraft.
The slightly cool outside air helped him feel refreshed, but he still needed to proceed to immigration. Because the other passengers had already cleared immigration while the party waited inside the plane, the process was swift. Vincent Greenhill, who had accompanied Yoo Jae-won for the 2 billion dollar investment, and the bodyguards hired in the United States also passed through immigration without difficulty. Whether due to instructions to facilitate their entry or not, baggage and personal item inspections were minimal. Even if the checks had been thorough, there would have been nothing to find.
After completing immigration, Yoo Jae-won stepped into the arrivals hall and was met with a familiar yet overwhelming sight.
“Waaaah! Yoo Jae-won! Yoo Jae-won!”
He had seen countless news reports about massive crowds of fans mobbing airports when Korean Wave stars visited Japan or other Asian countries. Now the same thing was happening to him. Although Kim Dae-seok’s earlier report had prepared him, witnessing it firsthand felt entirely different. People were chanting his name, and others waved signs declaring their pride in him. Naturally, dozens of reporters with large-lensed cameras were flashing away. Hundreds of people in total had gathered. While the numbers were smaller than the thousands that sometimes welcomed Korean Wave stars, the compact size of Gimpo Airport’s arrivals hall made the crowd appear even denser.
“Kyaaah!”
When Yoo Jae-won raised his hand and smiled brightly, the reaction was explosive—especially from the high-pitched voices of the many young women present. Meanwhile, the airport police forming a scrum at the front line sweated profusely to keep the crowd from pushing forward.
The experience of being welcomed by so many people was novel and pleasant, but an airport official soon appeared and urged them to move quickly to the press conference room. Fortunately, the conference room was far less chaotic than the arrivals hall. Only a limited number of reporters had been allowed inside, giving the space some breathing room. Yoo Jae-won took his seat alone on the stage while the others waited below. The press conference was scheduled to last exactly thirty minutes, and the first question came immediately.
“Baek Hyun-jin from Munhwa Newspaper. What was your reason for deciding to support the Tongil National Party?”
Yoo Jae-won smiled faintly at the question. Munhwa Newspaper had been established with funding from the Mirae Group—more precisely, with capital from Honorary Chairman Jeon Myeong-heon and the Jeon family—to represent corporate sentiment. The reporter looked visibly flustered by the brief answer. After all, tomorrow’s front page had already been reserved for Yoo Jae-won’s return and his declaration of support for Jeon Myeong-heon and the Tongil National Party. A single line would hardly fill the expected column space.
“At the same time, I believe in his sincerity. Honorary Chairman Jeon Myeong-heon is a man who always keeps his word. There are countless examples of him succeeding in projects that everyone else opposed, starting with Mirae Shipbuilding. Many people are viewing his sudden party formation and candidacy with suspicion, but I intend to dispel those doubts myself.”
Only then did the reporter breathe a sigh of relief. Although Baek Hyun-jin of Munhwa Newspaper had been given the first question, this was not a scripted exchange. Yoo Jae-won had no intention of holding the kind of formal press conference where questions were provided in advance and answers were rehearsed. His secretaries and executives felt the same way.
More questions followed in rapid succession. Because this visit was solely for supporting Honorary Chairman Jeon Myeong-heon’s campaign, most questions focused on that topic. Not all of them, however.
There were always people more interested in the side dishes than the main course.
“What is the reason you brought Vice President Vincent Greenhill with you on this visit?”
All eyes turned to Vincent Greenhill. The tall, imposing Westerner among the entourage naturally stood out.
“I think it would be better for the person who received the question to answer directly rather than me speaking for him.”
Yoo Jae-won yielded his seat to Vincent Greenhill. After several polite refusals—apparently having learned Korean etiquette—the vice president finally sat down, took the microphone, and spoke.
“A few days ago, there was a smear campaign against ID Investment’s Korean branch. I have come to investigate the matter.”
The reporters’ reactions were filled with question marks. Yoo Jae-won realized the reason a few seconds later: Vincent Greenhill had answered in English. Only after Kim Dae-seok rushed onto the stage to provide interpretation did the reporters nod in understanding.
“The soundness of ID Investment is beyond doubt. From this moment forward, we will demonstrate that clearly.”
The reporters diligently took notes on Vincent Greenhill’s statement. Then someone noticed something odd. “From this moment forward” implied that the work was beginning right now.
People often made a mistake. Because ID Investment’s main office was in the United States, they assumed its enormous capital was also located there. In reality, that was not the case. Yoo Jae-won had switched the firm’s primary bank from the Export-Import Bank of Korea to the Hongkong and Shanghai Banking Corporation. The account remained under Korean nationality, and ID Investment itself was no different. All of ID Group’s accounting work was handled at the Korean headquarters. This was in accordance with advice from Choi Kang-wook and was being strictly observed.
In other words, the moment the press conference began, ID Investment had already started mobilizing its 2 billion dollars to aggressively accumulate shares in the target companies.
At the same time.
Honorary Chairman Jeon Myeong-heon arrived at the Yeouido rally site—the very place where Kim Young-sam and Kim Dae-jung had once drawn a million supporters. While the crowd was not quite as massive as it had been back then, thousands—perhaps over ten thousand—people had gathered. After a resounding introduction from the Tongil National Party’s Yeongdeungpo District candidate, Jeon Myeong-heon stepped onto the podium holding a single document.
The document was a speech that his staff had worked through the night to prepare. It had been printed in large font using ID Office for the benefit of the presbyopic honorary chairman. At the very end, however, were three handwritten words that had not been there when the staff submitted it: Convertible Bonds. Bonds with Warrants. And a large X.
Honorary Chairman Jeon Myeong-heon had carefully noted Yoo Jae-won’s request so he would not forget it.