Mount Fuji Collapses
Mount Fuji collapses. Countless investment firms had been hit by the Nasdaq IT bubble burst. Even in the United States, smaller investment companies were unable to absorb the losses and went bankrupt, triggering a wave of aftershocks. When the damage was tallied by country, Japan ranked second only to the United States. The fact that Japan had suffered massive losses had already become major news several months earlier. Small-scale investment firms in Japan had likewise failed to avoid bankruptcy. Yet the reports were brief, one-off mentions with no follow-up coverage or in-depth analysis. The answer to that silence lay in the IDW file Yoo Jae-won was now opening.
The largest Japanese capital burned by its Nasdaq IT sector investments was the public pension fund. It had incurred losses in the trillions of yen—the worst investment failure in the history of Japan’s public pension system. Of course, even larger losses would come in the twenty-first century, but this remained the single greatest investment loss to date.
“Will they really sit still while the money flowing into their own pockets shrinks?”
The stories of Kobe Steel and Abe had probably felt distant to ordinary Japanese citizens. Even if Chevron conducted a full audit of the LNG carriers at the Kobe Shipyard and proceeded with refusing delivery and claiming damages, the pain would fall mainly on Kobe Shipyard itself. At the national level, it would amount to little more than a dip in the Nikkei. But what if pension recipients learned that the age at which they could begin receiving benefits was being pushed back and the amounts they were entitled to were being reduced? The document also detailed how the public pension fund’s reckless management had long been an open secret, and how every previous loss had been covered up in exactly the same manner.
“The decisive point is that they’re not even paying the amounts they promised to pension recipients.”
A few hundred yen missing each month. For those struggling, even that small sum mattered. For those more comfortable, it was an amount they could do without. Yet when viewed across all pension recipients, the unpaid total grew exponentially. It was hard to believe that an advanced nation like Japan was deceiving its own people this way, but the facts were undeniable. The Liberal Democratic Party had held power for decades, allowing bureaucrats and politicians to form a single entrenched interest group. Oversight naturally weakened, and whenever mistakes occurred, everyone looked the other way. The result was the worst possible outcome: corruption within the public pension system itself.
Those responsible probably did not even realize how serious the matter was—just like Kobe Steel. Quality falsification at Kobe Steel had become so routine that it was practically institutionalized. The practice had begun in the late 1970s, giving it genuine history and tradition. Yoo Jae-won had only learned of it through extensive media coverage in the twenty-first century; apparently, there had even been an executive specifically in charge of the falsification. The public pension fund operated the same way. When large-scale losses occurred in the Nasdaq, the standard procedure was to hide them rather than announce them properly. The document Yoo Jae-won was reading contained the information team’s findings on the actual state of the public pension fund’s operations, along with the cumulative losses: 3.66 trillion yen. Not won—yen. At current exchange rates, that amounted to nearly 40 trillion won. Even as a cumulative figure, the number was difficult for Yoo Jae-won to comprehend. He wondered what kind of portfolio could possibly produce losses of this magnitude. Even randomly selecting stocks with the intelligence of a monkey should not have produced damage on this scale. Only if someone had deliberately set out to lose the money would such a result make sense. It was incomprehensible how anyone could squander such enormous sums, even if it was someone else’s money.
Yoo Jae-won quickly wrote a simple macro. It would automatically upload the IDW file to large-scale Japanese online communities. He intended to post it across every public Japanese community site that his search bots had indexed the previous day. Of course, he did not forget to tip off the media as well.
“If there’s still no reaction to this, then Japan really is a lost cause.”
Without hesitation, Yoo Jae-won pressed Enter. The screen changed, revealing a map of Japan. It was not a professional digital map—just a simple outline filled with light green. Scattered across this simplified map were countless white dots. The dots clustered mainly around Japan’s major cities, with Tokyo boasting the highest number and Hokkaido the lowest. Each white dot represented an independently operated internet server. When Yoo Jae-won pressed Enter, the dots gradually turned red. The color indicated that the upload of the IDW file containing the public pension scandal had been completed.
“The world really has become convenient.”
Watching the map of Japan turn red, Yoo Jae-won murmured in a relaxed voice. In the early 1990s, the vast Pacific Ocean had been a massive spatial barrier. Even small amounts of information had been difficult to transmit across it. Now he could sit in a corner of San Francisco and instantly access the entire Japanese internet.
Several days passed.
— Ilseong Electronics’ insolvency far larger than imagined
— Memory semiconductors, once a foreign-currency earner, now a thing of the past. Selling at a loss since last year.
— Evidence of systematic siphoning of Ilseong Electronics’ assets uncovered!
— Creditors’ chances of recovery very low
— Creditors to directly sue the president and executives responsible for the insolvency
— Technology is the answer. Mirae Electronics equipped with new growth engine through flash memory!
Korea was in an uproar over Ilseong Electronics’ bankruptcy. Choi Kang-wook had moved quickly after receiving the tip, but he was already too late. Not only prime real estate in Seoul but even small plots of land in the provinces had all been sold. The funds raised had been funneled overseas through bizarre methods. Purchasing worthless artworks in the company’s name or acquiring unprofitable mining rights were the basics; there were also indications that money had been sent to paper companies. The final destination was almost certainly the Choi Hyun-hee family, but the operation was so elaborate and complex that tracing it had become impossible.
The simplest solution was to locate the working-level staff who had handled the transactions. Money did not move itself; someone had to carry out the work. Fortunately, one of the executives who had attached himself to Choi Kang-wook knew the name and readily provided it: Lee Hyun-woo, an ordinary secretary’s office employee. By the time Choi Kang-wook managed to identify Lee Hyun-woo, however, the man had already left the country.
— His destination is the Philippines. I will deploy people in the Philippines and find Lee Hyun-woo no matter what.
During the video conference with Yoo Jae-won to report on Ilseong Electronics and ID Group’s operations in Korea, Choi Kang-wook’s grinding teeth were clearly visible. This incident had exceeded even Choi Kang-wook’s imagination. While the nation struggled under the foreign exchange crisis and the entire country tightened its belt, someone had openly sold off the company’s prime assets and spirited the money overseas. It was difficult to fathom. His determination to capture Lee Hyun-woo and make him spit everything out was palpable.
Unfortunately, he was mistaken.
“Even if you send people to the Philippines, you probably won’t find him.”
— Pardon? Did you already look for him, Chairman?
“It’s not that. In my opinion, there’s a very high probability he is no longer of this world.”
At Yoo Jae-won’s words, Choi Kang-wook’s mouth fell open. It had been a long time since Yoo Jae-won had seen Choi Kang-wook so visibly shocked. The suggestion that the man was dead had clearly struck him hard. If he was no longer of this world, then he was dead. And since people did not simply die on their own, it meant he had been murdered. Yoo Jae-won could state this with certainty after reviewing Ilseong Electronics’ setup. Even though hundreds of billions of won had moved, only one person had handled the actual work. That person had gone overseas. Once he disappeared, the link between Ilseong Electronics’ slush funds and the Choi family would vanish as well. It was a blatant decision to bury one man.
— How is that possible in broad daylight?
“In Korea, murder is treated as a serious crime, but in a country like the Philippines with weaker public safety, such incidents happen frequently.”
Choi Hyun-hee had probably never even been informed of this matter. Eliminating one servant at Ilseong was not something that required reporting to the chairman.
— Good heavens.
“I expect that in a few days, articles will appear pinning all the blame on the missing man.”
Choi Kang-wook still could not hide his shock. Murder to silence someone. He had never encountered such thinking before. Yet the prediction that such articles would appear in a few days sounded disturbingly plausible, which only made it more chilling. While Choi Kang-wook remained stunned, a question suddenly occurred to him. Even though Yoo Jae-won was now an adult, he was still very young. How did he know all these things?
As Choi Kang-wook pondered this, Yoo Jae-won offered a silent prayer for Lee Hyun-woo. If the man had truly been murdered, he sincerely hoped Lee Hyun-woo would regress as splendidly as he himself had and take his revenge.
“In any case, the conclusion is that Ilseong Electronics’ value has fallen even further and reviving it is completely impossible, correct?”
— Yes, Chairman. It has only been a few days since we began investigating, yet the hidden insolvency exceeds what we were initially tipped off about.
“Is there no way to recover it from the Choi Hyun-hee family?”
— I would like nothing more, but… If it were a private company, we might be able to recover everything. However, a stock company is only liable up to the shares it holds. Moreover, once a corporation is granted legal personality, there is no entity left to bear unlimited liability once the corporation collapses.
“Then the answer is clear. Proceed as I mentioned before.”
— Understood, Chairman.
Neither Yoo Jae-won nor Choi Kang-wook needed many words. Acquiring Ilseong Electronics in its current state would only bring a mountain of bad debt. The best course was to dismantle it and absorb only the relatively sound assets—such as the semiconductor and home appliance divisions—into ID Technology. At the same time, they must not forget to file lawsuits against everyone responsible for creating this insolvency.
— I apologize for interfering while you should be focusing on the Japan operation.
“Not at all. Thanks to people like you, Vice Chairman, I can focus on Japan with peace of mind. Besides, you have performed even better than expected, so there is no need to worry.”
— Yes. I will contact you again if there are any developments.
The video conference with Choi Kang-wook ended. Yoo Jae-won immediately opened ID Talk to check the progress of the Japan operation. Although more convenient ERP systems existed, maintaining maximum security for the Japan operation was preferable. That was why he was conducting the Japan campaign through ID Talk, where all data remained encrypted.
As he had told Choi Kang-wook, the Japan operation was proceeding smoothly—though the developments differed significantly from Yoo Jae-won’s expectations. Chevron had decided to sue both Kobe Steel and Kobe Shipyard. They had confirmed that falsified steel and alloys had been used extensively not only in the vessels currently under construction at Kobe Shipyard but also in active LNG carriers. While some products did not differ greatly in quality from legitimate ones, most were of severely substandard quality. This posed a serious problem that directly affected the durability and stability of the ships. Chevron had begun inspecting vessels that used Kobe Steel products before U.S. maritime authorities could take action, and stated they would consider scrapping any ships found to have critical issues.
Once Chevron took this stance, other major oil companies could not remain idle. They began tracing vessels that used Kobe Steel products and followed the same process. All of these measures would generate enormous losses. Naturally, those losses would lead to claims for compensation against Kobe Steel—the source of the problem—and Mitsubishi Heavy Industries, which owned Kobe Shipyard. If Kobe Shipyard could not cover the damages, they announced they would hold the parent company, the Mitsubishi Group, directly responsible. The announcement was made personally by Fredrick Taylor II, giving it tremendous impact. On that single day alone, Mitsubishi-affiliated stocks fell at least 5 percent, while Mitsubishi Heavy Industries dropped more than 15 percent.
As a result, following Kobe Steel, the president and executives of Mitsubishi Heavy Industries were shown on television performing dogeza. Unfortunately, it was not a formal dogeza. Their hands were not pressed to the floor and their knees were not fully on the ground; their straight backs merely bent to about ninety degrees. These were the same Mitsubishi executives who had maintained an arrogant attitude toward Korean victims of forced labor, yet now they were excessively deferential. As with other apology press conferences, however, concrete measures for victim compensation were extremely limited. Given the enormous sums involved, an immediate promise of full compensation would have been unrealistic. Even this display was better than Abe’s response. As Chief Cabinet Secretary, Abe had tried to deny everything until the end. Once documents he himself had created while working at Kobe Steel were presented as evidence, however, he was immediately removed from office. Neither his grandfather’s influence nor his family’s powerful financial resources could shield him from plummeting approval ratings.
Yet Abe was the only one to resign over the incident.
“The Japanese are truly fascinating.”
Yoo Jae-won clicked his tongue. Japan was the country that had staged radical protests from the 1960s through the late 1980s. They had organized the All-Japan Federation of Student Self-Government Associations nationwide and made social movements a noisy affair. Even if their methods were extreme, there had been people willing to act. Now such people were nowhere to be found. Although the internet, newspapers, and television had all revealed that Japan’s public pension fund had suffered astronomical losses from failed investments and had even arbitrarily reduced payments to recipients to cover those losses, almost no one had taken to the streets. Only a handful of civic groups had staged protests.
“Does the internet still not wield much influence in Japan?”
Korea and the United States suggested otherwise. Internet penetration in Japan was progressing at a fairly rapid pace, and e-commerce was also active. As a result, among Nextcom’s various subsidiaries, Japan had become the third most important base after the United States and Europe. In the most charitable interpretation, after the collapse of the Zengakuren generation, Japanese citizens seemed to have forgotten how to express anger even in the face of injustice. Meanwhile, political forces, bureaucratic groups, and the business community continued their collusion without the slightest disruption. Even now, with the scandal exposed, the system operated without faltering. The investigation into Kobe Steel remained sluggish, and no one had taken responsibility or resigned over the public pension scandal. To date, the only resignation was Abe’s, and even that had come only after irrefutable evidence emerged.
Even this did not particularly please Yoo Jae-won.
“Shouldn’t he be arrested rather than merely resign?”
Although the statute of limitations had expired, for the sake of public perception and international reputation, at least a police investigation or some form of show trial should have been conducted. Japan, however, had done nothing of the sort. Viewed this way, it might appear that Yoo Jae-won’s Japan operation had completely failed. In reality, the operation was proceeding far better than expected. The dynamite had detonated properly. The entire world had witnessed Japan’s backwardness with perfect clarity.
Disgusted by the tepid reaction of the Japanese public, Yoo Jae-won turned his attention instead to spreading Japan’s disgrace throughout the United States, Europe, and the rest of the world. Japan, long regarded as an economic superpower and advanced nation, was demonstrating that even when a massive scandal erupted, it could be easily buried if one was close to power. This was especially disappointing to many scholars in advanced countries who had held idealized views of Japan. For Yoo Jae-won, none of it was new. Japan distorted even its own history at the national level; manipulating public pension data was only natural by comparison.
Yet this situation also brought renewed attention to another set of news. A small number of economists had long argued that Japan’s economic statistics were suspicious, and some of the data had now been proven accurate. Only at this stage did Japanese citizens finally begin to react. Moreover, when the manipulation scandal was reported domestically, the reaction had been muted, but once it received massive international coverage, the intense response Yoo Jae-won had been waiting for finally appeared. There were even terrorist attacks by far-right groups against the journalists who wrote the exposé articles, and searches were conducted for the leaker of the public pension data. It was a truly grotesque and negative phenomenon.
As time passed, the title of “trustworthy Japan” suffered fatal damage. This was a collapse of credibility. In the modern economic system—where everything operated like precisely meshed gears—such a loss of credibility greatly diminished predictability. Furthermore, hot money from around the world was already causing extreme turmoil in Japan’s foreign exchange and stock markets. As a result, the number of investors rushing to withdraw from Japan’s increasingly chaotic economy surged. Their exodus directly hammered the Nikkei. After the Kobe Steel scandal, the Nikkei had settled around 17,000 and was moving sideways. Now it began to plummet once more. The renewed collapse produced even more deserters, which in turn accelerated the fall. The speed of the descent was terrifyingly steep. The sight of the Nikkei plunging so sharply resembled nothing so much as Mount Fuji collapsing.