The Golden Highway
“My god! How much is all this?”
Choi Kang-wook’s jaw dropped as he stared at the Korea Export-Import Bank passbook. The final balance was on an entirely different scale from anything he had seen before. A single deposit from Electronic Arts stood out: $13,672,937. The American publisher had wired over thirteen million dollars in one lump sum—the interim settlement for one million units sold of the U.S. version of Keyboard Warrior. President Hawkins had kept his promise to settle early in San Francisco. At the current exchange rate of 689 won to the dollar, the amount came to roughly 9.4 billion won. Combined with domestic sales, ID Technology had earned well over ten billion won from a single piece of software.
While other conglomerates moved mountains of steel, glass, and labor to sell shoes, televisions, and cars, ID Technology had generated this fortune from nothing more visible than a few floppy disks. The bank teller’s voice broke his reverie.
“Is there anything else I can assist you with, sir?”
Numbers like these were exactly why the branch had called the office in surprise. Choi Kang-wook still felt awkward receiving such deferential treatment; the branch manager himself had come out bowing.
“No, this is sufficient. Thank you.”
The use of the money had not yet been decided. The company’s sole decision-maker and core talent, Yoo Jae-won, had been holed up lately developing new products. He had told Choi to handle routine matters independently, so even this windfall might be reported with nothing more than a fax. Still, reviewing past instructions, Choi could guess the direction: securities and real estate.
The stocks Yoo Jae-won had pointed to were climbing at a terrifying pace. After the Olympics they had drifted lower through winter, but from the end of December they had begun a steep ascent. Daeshin Securities, bought at 12,000 won per share, had crossed 20,000 won with the new year and was now charging toward 25,000. Daewoo Securities had risen almost as sharply. The original 300 million won investment had already doubled to 600 million.
Choi had half-expected it, yet the unbroken string of successes left him uneasy. As an executive, success was welcome; as an adult, he worried that flawless victories could breed arrogance. He had once thought a little bitterness from the stock market might be healthy. Instead, another triumph. Real estate had followed the same pattern. Though he had not handled the transactions himself, he heard the reports: part of the Yoo family’s ancestral land had been requisitioned for a tunnel, and the agent Yoo Jae-won hired had secured far better compensation than expected. The man was racing down success’s golden highway at breakneck speed.
Yet success had not changed his character. Choi had met plenty of company presidents and businessmen during his years as a lawyer—some in their late thirties, others silver-haired. Most believed their own path to success was the only possible one. They ignored advice, bristled at criticism, and eventually created the very problems that sent them to lawyers. Yoo Jae-won was nothing like them. When Choi offered counsel on business or other matters, Jae-won accepted it without argument—sometimes so readily that Choi found himself double-checking his own suggestions before speaking.
His treatment of employees was equally telling. From executive secretary Kim Dae-seok to the women working part-time at the Yeoju factory, everyone was addressed with the same courtesy one would show an elder. Choi had yet to witness a single instance of the arrogance that often accompanied rapid success.
“At this point, I have no choice but to acknowledge it.”
Acknowledge? Wholeheartedly. At the same time, he could not help wondering how someone so young could possibly manage it all.
“The president is on his way,” the accounting clerk announced when Choi returned to the office. “He just left the Mirae Group headquarters in Gye-dong.”
Speak of the tiger and it appears. Perfect timing.
“They already wired the money?” Yoo Jae-won grinned as he examined the passbook. 13,672,937! Even without the dollar sign it would have been an impressive figure; with it, the sum was staggering. The only disappointment was the falling exchange rate; converting to won would shrink the amount more than expected.
“It’s not 14.99 million dollars, though. That’s odd, isn’t it?”
The wholesale price to retailers was $29.99, and ID Technology’s share was half of that—$14.995 per unit. One million units should have yielded $14.99 million.
“California has a sales tax,” Jae-won explained. “When you add the withholding taxes, 8.25 percent of revenue disappears.”
Ah, taxes. Each U.S. state had its own structure, and California’s sales tax was notoriously high. Since they had agreed from the beginning to pay every tax owed, Jae-won simply nodded and moved on.
“What will you do with the funds?” Choi asked.
On February 1st, Yoo Jae-won had promoted Choi from legal team leader to chief of staff. Robert Halley had taken the vacant legal post. The American lawyer matched Choi in character and ability, and surpassed him in foreign-language skills; an American fluent in Korean was ideal. The promotion was straightforward: it confirmed Choi’s position as second-in-command at ID Technology and ensured that, once the company grew into a true group, he would remain directly beneath Jae-won, ready to oversee other subsidiaries.
“I’m going to establish a new company,” Jae-won said. “A firm specializing in financial products and real estate investment.”
Two businesses under one roof would constitute a group—small by chaebol standards, but that would change in a few years.
“As expected,” Choi replied. It was the largest option among those he had anticipated.
“Have you chosen a name?”
“ID Investment. We won’t limit ourselves to Korea; we’ll play on the global stage.”
“Global.” The word had been fashionable since the ’88 Olympics, yet from Jae-won’s mouth it did not sound like empty boasting. ID Technology had already reached the United States and Europe through partners, and in just a few months had earned thirteen million dollars.
“Will you invest all of this revenue into ID Investment?”
Jae-won shook his head. “No. I’ll distribute the entire amount as dividends first, then capitalize the new company with my own funds.”
In other words, a 100-percent personally owned company. Though technically a sole proprietorship, the capital would be enormous—nearly five billion won. Choi doubted anyone outside the chaebol families currently commanded that much liquid investment capital in Korea. He wondered why Jae-won insisted on this structure. Real estate could easily absorb even fifty billion won; larger capital was always better. Yet Jae-won wanted the dividends paid out so the investment firm would be purely his own.
“The securities investments are the same,” Jae-won continued. “They’re fine for me, but to outsiders they look extremely risky. Shareholders would be uneasy. I’ll accept investment only from those who trust my methods.”
Choi understood. Even he, watching the Daeshin and Daewoo trades from the sidelines, had felt his stomach tighten. The Yeoju shareholders had received no advance notice, so there had been no complaints, but if they had been told in advance, questions would certainly have arisen.
“That’s probably wise. Still, after the special dividend in December, another one this month will surprise them.”
Choi knew the shareholders well: the principal and vice-principal of Deokjin Elementary, President Park of the perilla-oil factory in the Deokjin industrial complex, and Jae-won’s parents. Except for President Park, they were all simple, honest people. When the December dividend had been prepared, they had asked whether they were truly entitled to such large sums and whether draining so much cash would burden the company. They had invested out of goodwill, trusting only in Jae-won’s programming talent and the solid contract with Sambo Computer. Receiving this much money in just a few months had been overwhelming. This new dividend would be on an entirely different scale.
“You’re distributing the entire 1.3 billion dollars—9.4 billion won—from the U.S. sales?”
“We still have the securities investment, don’t we? How much is that worth now?”
“Around 630 million won.”
“Then we’ll liquidate enough stock to bring the total dividend to ten billion won.”
Figures in the billions already felt like play money, yet they were real. The December dividend had been set at 100 million won. This one was a hundred times larger. Calculating each shareholder’s share was simple: multiply what they received in December by one hundred.
“They were already overwhelmed in December. A hundredfold increase… I can’t imagine how they’ll react.”
It could not be helped. Because of its nature, ID Investment had to be 100-percent owned by Jae-won. The only source of capital was dividends. If Jae-won received dividends while the other shareholders did not, the picture would be inconsistent.
“So you’ll establish ID Investment with roughly five billion won,” Choi summarized.
“I’ll invest about 4.5 billion as starting capital. The rest I intend to donate.”
“Donate?” Choi’s pen paused over his notebook. He had never expected the word to appear in this conversation.
“The Salvation Army or the Red Cross?”
Jae-won shook his head. Those were the representative charities of the eighties and nineties, but he did not entirely trust them. If five hundred million won were donated, he could not be sure how much would actually reach people in need.
“Nothing so grand. I’m going to start with what’s right in front of me. Naeo Village has a paved road up to the entrance, but inside the village it’s still dirt. Rain or snow turns it into a quagmire in minutes, and without proper drainage it never dries.”
It was not a grand donation, yet it was not a small one either. Paving the common road used by Jae-won’s relatives and the rest of the villagers was a genuine act of giving.