A Script on Cue
Osaka, Japan — the CEO's office at Shinei Chemical headquarters.
"Shinhwa Weltech has flatly rejected our proposal for exclusive rights to their technology."
At the report from the head of Overseas Operations, Shinei Chemical's president, Nakamura Kenji, took off his glasses, set them down, and asked a question of his own.
"Nothing else?"
"Not a word. They didn't even leave room for price negotiations. Simply an air of disinterest."
Nakamura's lips curled into a smile. There wasn't a trace of alarm on his face. On the contrary, he looked as relaxed as a man who had just heard the answer he'd been waiting for.
"Everything is going exactly as expected."
"Yes, sir — from the initial scouting offer for Director Park Jin-hyuk down to this rejection of our technology buyout. It's clear that whoever acquired Shinhwa Weltech isn't interested in a simple cash-out."
Shinei had been keeping a close eye on Shinhwa Weltech for a long time. They coveted the technology, yes, but they had waited for the cash-strapped company to collapse under its own weight — all so they could scoop it up for pennies.
But in that fleeting moment, a family office of unknown identity had swooped in and snatched Shinhwa Weltech away.
"My thoughts exactly. If they were a private equity fund chasing short-term gains, they would have pounced on our proposal — or at the very least, opened a negotiating table to drive the price up."
"Precisely. Six million dollars would have been pure profit, even from their standpoint."
"Which is exactly why I poked them this time. To find out what kind of people we're dealing with."
Nakamura leaned back in his chair.
The other side was no pushover. They understood the value of the technology, which meant they prized future worth over immediate cash.
"What should we do?"
"What do you mean, what? We proceed with the original plan. Send a formal letter — politely, this time."
Nakamura's eyes glittered.
"Tell them that Shinei wishes to establish a joint venture with Shinhwa Weltech in Korea."
"A joint venture, sir?"
"That's right. The acquisition is off the table, and now that we know they weren't snapped up by some hit-and-run investment firm, we go back to the original plan."
In truth, what Shinei truly wanted was not merely the single technology published in Park Jin-hyuk's papers.
The technology was attractive, of course — it could slash process costs dramatically. But the picture Nakamura had in mind was far grander.
His gaze was fixed not on Japan, but across the sea — on Korea.
"Korea's semiconductor and display markets are climbing at a frightening pace. In a few years, they may well be bigger than ours here in Japan."
The department head across from him wore a look of disbelief.
"Sir, surely not. The technology gap is still there — the idea of Korea overtaking Japan is..."
"You're far too complacent. Look at how fast Taesan Electronics and Hansung Semiconductor are charging upward. They're investing in production facilities like madmen."
Nakamura spoke quietly as he studied his subordinate.
"Our Shinei's technology rivals the majors. And yet the industry still treats us as a hidden powerhouse. Because of our size, we're stuck being labeled a mid-tier company for eternity."
"..."
"Within Japan, it's nearly impossible to break into markets the majors have locked down. If we want a slice of that pie, we need a new battlefield. That battlefield is Korea."
The Korean market was still unclaimed territory. Most Korean companies were importing from majors like Japan's Stella or America's Dow.
What Shinei needed was a solid bridgehead into the Korean market. And Shinhwa Weltech was the perfect partner for the job.
"Send the joint venture proposal. The justification is impeccable, no? Combine our capital with their technology and a Korean sales network — they'll have a hard time saying no to that."
"Understood, sir. I'll prepare it immediately."
"The rest can wait. You can't fight until you climb into the ring, can you?"
Nakamura nodded with a smile.
Late October 2004. The study in Kim Seok-jun's home.
"So, you've been having fun with stocks lately?"
At Kim Seok-jun's question, I set down my cup and smiled.
"Yes, sir. The share price of the company I invested in has been rising like crazy."
"I heard from Director Jung. The company's name was..."
"Eugene Pharmatech."
"Ah, right. They're making waves in stem cells these days, aren't they?"
At this point in history, South Korea had fallen into a giant black hole called stem cells.
In time it would be exposed as a national-scale fraud, but for now, market logic be damned, the entire country was enraptured by that magical word — as if it were some holy grail that would erase every human suffering.
"With your keen eye, what do you think? Will it really cure every disease? It looked like remarkable technology to me."
"I don't believe so."
At my firm answer, Kim Seok-jun's eyes went wide.
"No? And yet you put money into it?"
"I judged that the technology itself had no substance. But I believed the psychology of the crowd would drive the price up — so that's why I invested."
A flicker of disappointment crossed Kim Seok-jun's face. Understandable, really — the media had been trumpeting the rosy futures and eternal life that stem cells would supposedly deliver, day after day.
"Stem cells regenerate cells — but not every disease stems from a cellular problem, does it?"
"..."
"If a revolutionary new scalpel were invented for surgery, no one would call it a panacea. Stem cells are, in the end, just another tool."
"And yet the whole country is in an uproar over them."
"Yes. And it's not just Korea — the global scientific community sees this as a breakthrough for treating incurable diseases. If the first technology of its kind comes out of Korea? It's the perfect fuel for a fire."
What's more, Korea had always been treated as a backwater in fundamental science.
The saga of a hero emerging from that position created a false myth — one that fused a collective inferiority complex begging to be washed away with the halo of political patronage.
"The Eugene Pharmatech I invested in was, until a year ago, nothing more than a subcontractor making electrical components."
"I beg your pardon?"
"Of course, today it's a full-fledged pharmaceutical company with a shiny signboard. A struggling company whose shares traded at 300 won apiece a year ago was acquired by a fledgling biotech venture and backdoor-listed."
A backdoor listing — the practice of an unlisted company entering the stock market through the acquisition-merger of an already listed firm, sidestepping the grueling screening process. A method that came dangerously close to a loophole.
Eugene Pharmatech was a textbook case.
"You'll see more of this going forward. The stem cell theme is going to burn white-hot."
"I see what you're saying. You intend to get out before the bubble bursts."
Kim Seok-jun wore a bitter expression for a moment, then seemed to collect his thoughts and turned to me.
"All right, let's set that aside. Today, we were going to talk about Shinhwa Weltech, weren't we?"
I nodded and explained the proposal Shinei Chemical had made at Shinhwa Weltech over the weekend. Kim Seok-jun listened in silence.
"For a rejection, that's not a bad offer at all, is it? What we paid was under 5 billion won — and they're offering well above that."
"On paper, it's an excellent exit opportunity, certainly. But I sense something else going on beneath the surface."
"Something else?"
I nodded and continued.
"Deals involving core foundational technology like this typically open at a minimum of ten million dollars. But Shinei quoted exactly six million — just enough to cover what we paid, as if they somehow knew our acquisition price."
Kim Seok-jun leaned forward.
"And then there's the sequence — first they propose poaching Director Park, and the moment that fails, they suddenly want to buy the technology itself."
"Well, naturally, since the scouting failed—"
"It feels like every step was prepared in advance. Click, click, click."
That was exactly what unsettled me.
Negotiation is, by nature, unpredictable.
When your first offer is rejected, the normal response is to falter, to blurt out a higher number on impulse, to show emotion. That had been the pattern through countless M&A deals I lived through in my past life.
But Shinei had marched through each step like a machine following a manual.
"If their goal were simply the technology, it wouldn't proceed this mechanically. This kind of clean, scripted flow only emerges when it's part of a long-term plan."
"How could you possibly know that?"
Kim Seok-jun looked genuinely astonished.
"You're right, you know. In real negotiations, when you hit the true objective and get refused, the other side usually throws out something higher on impulse, or lets emotion creep in. But listening to you — it does feel like they're following some fixed roadmap."
Kim Seok-jun marveled, shaking his head.
"Even after decades on the front lines of management, this is hard to grasp. And yet you speak as though you've spent a lifetime running companies."
"I read it in books."
"You think books teach this? It's instinct, my boy. Something you were born with."
I ducked my head slightly at the flattery, then pressed on.
"To continue — I believe they have a next move prepared as well. I wanted to draw it out of them."
"And since you refused, that next move comes out now? If you've thought that far, surely you've guessed what comes after?"
I answered with quiet conviction.
"Yes. I suspect their real objective is direct entry into the Korean market."
"Into Korea?"
"In Japan, Shinei's technology is regarded as equal to the majors'. But in terms of revenue and supply chain, they're stuck at mid-tier, year after year."
When I'd heard Shinei's name and dug into it, I found that the first-tier supplier lines of Japan's semiconductor and display makers were already saturated.
The majors held those lines in their grip, and Shinei was perpetually relegated to second place.
"..."
"To break through, they need a new market. And that market is us."
"Didn't you say they do chemicals for semiconductors and displays?"
"Yes. And Hansung Semiconductor, Taesan Electronics, and Geumseong Display are all rising at a terrifying pace right now."
Those companies' technology would reach the very top of the world within a dozen years. Shinei was looking ahead to Korea's explosive growth and trying to stake their claim before anyone else.
"But entering Korea directly means running into regulation and a whole list of other obstacles."
"Exactly. Even domestic companies struggle with environmental regulations on chemicals and factory permits — and a foreign firm? A Japanese firm, at that? It won't be easy. And you can't ignore anti-Japanese sentiment, either."
"There's one card that solves all of it in a single stroke. A joint venture."
At my words, Kim Seok-jun's eyes gleamed.
"A joint venture, hmm..."
"The fact that they keep making these step-by-step proposals to us suggests, strongly, that this is a kind of probing process — testing whether we can become a suitable partner for their long-term plan."
"Now that I hear you lay it out, it fits perfectly. Strange. I'm no pushover, but everything you point to sounds like the right answer."
"You flatter me, sir."
"Still, let me give you a hint. I'm supposed to be offering you advice, after all."
"I'm listening."
As I bowed my head, Kim Seok-jun spoke.
"If, in the next round of talks, they come back not with a joint venture but with a bigger number — then it truly is the technology they want. Crushing you with money is simply more convenient than dragging things out."
"I understand. I'll keep that in mind — though my own guess may well be wrong."
At my answer, Kim Seok-jun smiled with satisfaction.
"So, in any case, if we wait, they'll come calling."
"Yes, sir."
"Good. Then let's watch and see whether things unfold as you predict."
"Yes. Then I'll take my leave first."
Just as I offered my farewell and rose from my seat, Kim Seok-jun raised a hand to stop me.
"Won't you stay for a meal?"
"I have to... study. The CSAT is next month."
"Honestly! Talking with you, I forget who I'm speaking to half the time."
Kim Seok-jun laughed heartily and slapped his knee.
"Is the CSAT preparation going well?"
"Yes. I expect to score about as well as I've projected."
"Good. If you get into Hankook University, I'll give you my present."
"May I look forward to it?"
"Hahahaha, you rascal. Finally acting your age, are we? Yes. Look forward to it all you like."
I said my goodbyes to Kim Seok-jun and stepped outside. The moment I climbed into Jung Tae-sung's waiting black sedan, Jung Tae-sung turned from the driver's seat.
"Sir, we just received a call from Shinhwa Weltech."
"Shinhwa Weltech?"
It had been barely three days since we'd met on the weekend. What could have happened in the meantime?
Don't tell me...
"Was it... contact from Shinei, by any chance?"
"Yes, sir."
So the moment we rejected their notice, they'd come back with a new proposal? They were certainly in a hurry. No — they were meticulously prepared.
"What did they say?"
"A proposal to establish a joint venture in Korea, where Shinhwa Weltech and Shinei would jointly develop the technology and manufacture products."
Just as I thought. They were moving exactly along the lines I'd predicted. This latest offer was very likely Shinei's true hand.
"Tell them our answer will be delayed a little."
"Sir?"
"After the CSAT, I'll receive them myself."
"Understood, sir."
Jung Tae-sung answered and started the car. I gazed out the window. Autumn was quietly passing by.
The more impatient they get, the more time works for us. Shall we let them stew a little longer? The desperate side is always the first to make a mistake.
Before I knew it, a smile was spreading across my face.