The Largest Restructuring Since the Founding of the Republic of Korea
Chairman Lee Tak-hyeon looked over the children gathered in the living room and snorted.
"There's a reason the company has been creaking along. With all of you this idle, how could it possibly run the way it should?"
At Lee Tak-hyeon's scorn, Lee Mun-jong's face flushed a little.
Lee Jeong-eun, unlike her brother, paid the ridicule no mind and spoke straight at her father.
"Father. Do you have any idea what the company is like right now?"
"Your father may not know how the company is doing, but as chairman of the Ilhyeon Group I know far better than you do, so there's no need for you to worry."
Lee Tak-hyeon fixed Lee Jeong-eun with a glare and snapped the words out like a whip.
Lee Jeong-eun seemed entirely unmoved by the retort.
"Father. That bastard is wrecking the company."
She jabbed a finger at Kim Seong-ho and raised her voice.
Lee Tak-hyeon's eyes followed her pointing finger to Kim Seong-ho; then he let out a short, dry laugh.
"I've heard that line somewhere before. Haven't I, Second?"
He turned the sneering remark on Lee Sang-jong, who sat quietly off to one side.
Lee Sang-jong said nothing. He simply kept his head bowed. Between the lowered lids he shot a sidelong glance at Kim Seong-ho.
After Kim Seong-ho had ordered President Park Hak-ju of Ilhyeon Securities to liquidate Lee Sang-jong's accounts, the KOSPI had hung its head and kept falling. The sudden exit of the enormous sum Lee Sang-jong had poured into the market had certainly helped drive prices down, but any participant could see that the entire market had turned bearish. Because of that, Lee Sang-jong had been able to limit the damage. Of course, closing the positions all at once had still cost him nearly ten billion won, yet holding on would have seen the loss climb to twenty or even thirty billion; so "damage control" was the more accurate phrase.
Kim Seong-ho answered Lee Sang-jong's look with a thin smile.
Lee Sang-jong twisted his lips bitterly at the smile and looked away again.
He's embarrassed that he was wrong. Still, he survived thanks to me, so he has no choice but to back me now.
Kim Seong-ho tossed the silent question into the air and almost thought he heard Lee Sang-jong's answer. He withdrew his gaze from his brother-in-law and turned to Lee Jeong-eun, who was still working herself into a fury.
She kept pouring out accusations of Kim Seong-ho's wickedness to Lee Tak-hyeon.
"That bastard is shaking our entire group. Father, he's trying to sell off Ilhyeon Foods—the company you built yourself. Did you know that?"
"I know."
Apparently irritated by her whining tone, Lee Tak-hyeon dug a finger into his ear and answered.
"Stop the crying and speak calmly. You've been working in the company for years and you're still like this. Tsk tsk."
"How am I supposed to keep from crying? They're liquidating Ilhyeon Housing! The company you founded, and that maniac is trying to wipe it out!"
"I know that too. I know, so stop it already."
Lee Tak-hyeon raised a hand and pointed at Kim Seong-ho.
"Do you even realize which department the Restructuring Headquarters he heads belongs to? It sits directly under my own secretariat. Everything he reports comes to me through Chief Hwang. That means I know about it before you do."
He glared at Lee Jeong-eun with eyes wide open.
"If you didn't know any of this, you have no business sitting here facing me right now. If you did know and still kept talking, then you must have something else you want to say. So say it. Don't waste everyone's time gathering all your siblings here for nothing."
Told to get to the point if she had one, Lee Jeong-eun clenched her teeth hard. She had known emotional appeals would not work on Lee Tak-hyeon, yet his reaction was harsher than she had expected, and her mood soured further.
"Fine. I'll say it straight."
She glared at Kim Seong-ho and spoke.
"The presidents of Ilhyeon Foods, Ilhyeon Housing, and the rest came to me carrying their resignation letters. They said if things keep going like this the whole group could collapse."
"They came to you?"
Lee Mun-jong clicked his tongue and turned to Lee Tak-hyeon.
"Chairman, they came to me as well. I threw them out because all they did was whine about how unfair the restructuring was."
He cast a sidelong glance at Lee Jeong-eun.
"Looks like they went to Third next."
"They came to me because you wouldn't listen, Oppa."
Lee Jeong-eun cut across him.
"With the situation this bad, you're the one with the problem for refusing to hear them out."
"Problem? What problem?"
Lee Mun-jong stared at the sister who was blaming him as if he could not believe his ears.
Lee Jeong-eun ignored the look and addressed her father again.
"Father. He's selling off and liquidating the companies you built, wiping them out one by one. Are you just going to sit there and watch?"
Lee Tak-hyeon regarded her for a long moment, then said,
"What do you plan to do about Ilhyeon Fashion?"
"What? What is that supposed to mean?"
Lee Jeong-eun echoed the sudden mention of Ilhyeon Fashion as if she could not follow.
But the question had not been aimed at her.
"We're considering selling Ilhyeon Fashion as well."
Kim Seong-ho answered Lee Tak-hyeon's inquiry.
Lee Jeong-eun's head snapped toward him.
Meeting her stare without flinching, Kim Seong-ho continued addressing the chairman about Ilhyeon Fashion.
"The fashion business is not a model that suits Ilhyeon. Returns relative to revenue are markedly low, overseas distribution channels are difficult to open, and even if we do break into foreign markets the expected lift in sales would be modest."
"You! What the hell are you saying?"
Lee Jeong-eun shouted at him, but Kim Seong-ho's words did not pause.
"Rather than keep an Ilhyeon Fashion that can only lean on the domestic market, the Restructuring Headquarters judges it better to convert the stores and other assets it holds into real-estate value and put them on the market."
"If we sell, is there a buyer?"
"I've arranged a meeting with the Dugyeong Group three days from now."
Lee Jeong-eun's eyes flew wide. Not only had he already found an acquirer; he had even set a negotiation table. The news left her almost faint with shock.
Lee Tak-hyeon nodded and gave Kim Seong-ho an order.
"Whatever you're going to sell, sell it fast. This kind of work is a race against time. Hold out for one more coin and you can end up with neither rice nor porridge. You understand what I mean?"
"Yes, sir. I understand. With more affiliates that need cleaning up than we can count, shortening the timeline matters more than greed for small change. I'll move as quickly as possible on the sales."
Watching Kim Seong-ho and Lee Tak-hyeon trade remarks so smoothly, Lee Jeong-eun could no longer contain herself and shouted,
"What on earth are the two of you doing? Why are you selling Ilhyeon Fashion?!"
"Didn't you hear?"
"Didn't hear? Hear what?!"
She glared as if she meant to devour him.
Kim Seong-ho answered without the slightest sign of being cowed.
"Well, Sister-in-law isn't the president, so it may have taken a little longer for the news to reach you."
"What is that supposed to mean?"
The corner of Kim Seong-ho's mouth lifted slightly.
"I already notified the president of Ilhyeon Fashion about the sale process. I told him to keep it quiet for a while so the staff wouldn't panic... It seems the president never mentioned it to you, Sister-in-law."
"Tsk tsk. He ought to look after his own company properly. Why stick his nose into someone else's?"
Lee Mun-jong spoke as if he found Lee Jeong-eun pitiful.
Her gaze, with nowhere left to go, swept the room and finally landed on Lee Sang-jong—the brother who, until recently, had joined her in condemning Kim Seong-ho.
"Oppa. You say something too!"
At her plea Lee Sang-jong's mouth twisted into a bitter line.
Then Lee Tak-hyeon spoke first.
"You half-wit."
Lee Jeong-eun turned to stare at her father, completely unable to grasp why he was suddenly calling Lee Sang-jong a half-wit. Confusion left her unable to collect her thoughts.
Lee Tak-hyeon paid no attention to whatever she might be thinking and continued addressing Lee Sang-jong.
"Be grateful Kim Seong-ho stepped in and the damage stopped at that level. Cause another mess and you'll see."
"I won't cause any more trouble. I'll reflect on it at home."
"Tsk. You should have done that from the start."
Lee Tak-hyeon looked down at the bowed head of his second son with open disdain, then turned to Kim Seong-ho.
"How much do we have to pay Ilhyeon Securities?"
"The loss comes to roughly nine billion won. I told them I would settle it by the end of this week."
"Forget it. Leave it."
He gestured to Hwang Do-beom, who stood behind him. When the chief of staff approached, Lee Tak-hyeon issued the order.
"Take ten billion out of the vault and settle it."
"Yes, sir. Understood."
Hwang Do-beom answered and stepped back. Lee Tak-hyeon spoke to Kim Seong-ho again.
"You don't need to spend your own money. I'll cover the loss, and you can just reclaim the Ilhyeon Construction shares that were put up as collateral."
"Chairman, even so, nine billion is enough."
"Think of the rest as your commission."
Having promised a billion-won bonus for the trouble, Lee Tak-hyeon rose from his seat. He looked down at Lee Jeong-eun, who still had not grasped the situation, and snorted.
"Try having as much sense for work as you have temper. Who do you think is cutting whom slack right now?"
"Father, I—"
"And Chief Hwang."
"Yes, sir."
At the summons Hwang Do-beom answered in a clear voice. Lee Tak-hyeon gave one more instruction.
"It seems the presidents of Ilhyeon Foods and the others left their resignation letters with Jeong-eun. Collect them and process every last one. Who do these people think they are, trying to threaten us with resignations? Do they think the company belongs to them? A bunch of hired hands who just take a paycheck, and their guts have spilled clean out of their bellies. Fire the lot of them. And you."
He pointed a finger at Lee Jeong-eun.
"You get out of the company too and stay home reflecting like your brother. I coddled you because you're my daughter, and now you've got no manners left."
He gave her one last hard stare, then turned on his heel.
Lee Jeong-eun stretched a hand after him, her voice trembling.
"Father. I was only thinking of the company—"
But her words never reached him. Lee Tak-hyeon left the living room and headed for his study, leaving only his children and son-in-law behind.
The restructuring of the Ilhyeon Group continued its relentless march.
Any company that still held residual value yet could not walk the same road with Ilhyeon was placed on the market. Firms such as Ilhyeon Foods and Ilhyeon Fashion found new owners. Where a clean sale looked unlikely, the decision was made to break the company apart: real estate that could turn into cash and other highly liquid assets were stripped out and sold, while everything else was written off and put through formal liquidation.
In this way some twenty affiliates were carved away from the Ilhyeon Group.
Even the companies that survived inside the group did not escape unscathed. They endured bone-cutting processes to lower their debt ratios; several, cited for overlapping businesses, were forced into mergers with sister companies or outright withdrawal from certain lines of work. In the course of it all, vast numbers of Ilhyeon employees were let go. Roughly twenty thousand staff left the Ilhyeon name behind, and another five thousand who had been scheduled for new hires were shifted to a waiting list, left only to hope the doors would open again someday.
The market watched Ilhyeon's high-intensity restructuring with astonished eyes. Never since the founding of the Republic of Korea had a restructuring of this scale been carried out. Some people even wondered whether Ilhyeon was simply shutting its businesses down altogether; the depth of the cuts and the breadth of the withdrawals were hard to comprehend.
Yet among economists there were those who applauded the judgment.
On television a well-known professor of economics was speaking about Ilhyeon's restructuring.
"What has been the chronic problem of our large corporations?"
He looked at the anchor and heatedly continued.
"Octopus-style expansion—that has been the deep-seated disease of Korean conglomerates."
"We must break that habit if Korea is ever to step up into the ranks of the advanced nations."
"So you're saying Ilhyeon is abandoning the octopus model and concentrating only on businesses that make money, businesses that are competitive?"
"Exactly. Going further, they will pursue only businesses that can win on the world stage. How beautiful a sight is that?"
The professor spread both arms as if he had just heard a sublime melody, his face rapturous, and continued his praise of Ilhyeon toward the camera.
"What is Ilhyeon? It is one of the proudest enterprises of our Republic. The opponents Ilhyeon must fight are not other Korean companies. Its rivals are the firms in America and Japan. Yet how can Ilhyeon keep selling cookies and bread?"
He posed the question to the anchor, but clearly expected no answer. Before the anchor could speak he answered himself.
"It cannot. That is why it is right to cut domestic businesses boldly and focus on the ones that export and earn dollars. I believe this restructuring by the Ilhyeon Group is an entirely correct choice for the Republic of Korea."
Kim Seong-ho listened to the economics professor on the television, smiled without a word, and slipped an almond into his mouth.