The Franchise Fee Trap
The incident had begun roughly two years earlier, when QS Electronics started demanding franchise fees from its dealership owners—fees that had never existed before. Suddenly, the dealers were being told to pay 1.5 million won a year, money that wasn't even mentioned in their contracts. Naturally, they pushed back hard. Kwon So-hee, who owned ten dealerships, stood to lose fifteen million won annually in pure cash. But QS Electronics retaliated by delaying new product shipments and excluding non-paying dealers from promotional events. In the end, virtually every dealer was forced to pay.
Then the next payment cycle arrived. Kwon So-hee, facing an immediate fifteen-million-won hit, messaged the dealership management team asking to delay the payment because she was short on cash. The reply she received was strange: the franchise fees were managed directly by the president's office, not the dealership team, so they couldn't help her. Suspicious, she consulted lawyers and filed a complaint accusing Kwon Seong-gyun of embezzling the fees. As evidence, she submitted chat logs with the dealership management staff.
I could already see why the case would end with a prosecutor's non-indictment rather than reaching trial. Deciding which department handles which corporate funds is purely a management decision. Unless Kwon Seong-gyun had used the money for personal purposes, embezzlement couldn't be established. The internal QS Group documents that Chairman Kwon Byung-do had mentioned at dinner—documents supposedly handed over to the prosecution—weren't strong enough to prove a crime either.
Through Oh Il-mu, who had spoken separately with Kwon So-hee's lawyers, I confirmed the documents were actually corporate card usage records of QS Electronics executives that Kwon Je-gyun had given to Kwon So-hee, who then passed them to the prosecution. Naturally, Kwon Seong-gyun's records were included. When he heard his older brother had been accused of embezzlement, Kwon Je-gyun had seized the opportunity to leak the card records—the first thing that comes to mind when thinking of embezzlement. I already knew Kwon Je-gyun was the type to act first and think later, but apparently he hadn't even reviewed the records properly. Oh Il-mu said there was nothing in them that could reasonably be interpreted as embezzlement by Kwon Seong-gyun.
What I needed now was evidence that Kwon Je-gyun had leaked internal company data to his own brother. If I showed that to Chairman Kwon Byung-do, it would deal Kwon Je-gyun a devastating blow.
I found Kwon So-hee's number in my contacts and sent a message.
"Noona, can we meet for a bit?"
"It's been a while. What's this about?"
"I won't beat around the bush. I think I'll be handling Kwon Seong-gyun's embezzlement case. Instead of going through the full legal process, I wanted to ask if we could work something out beforehand. Are you free for lunch today?"
"Sure. I heard on the news that you'd become a lawyer, but I didn't expect we'd meet like this. Okay."
The fact that she agreed to meet meant Kwon So-hee wanted something from me too. Whatever it was, I'd give it to her and find out what she knew about the documents Kwon Je-gyun had passed her.
* * *
At lunchtime, I met Kwon So-hee at a Western restaurant—the same woman I'd only seen through a messenger app profile picture. My first impression was of a middle-aged woman desperate to look like a noble lady. The earrings, necklace, and fur stole draped over her shoulders beneath her voluminous wavy perm probably cost more than a mid-size car. Add the clothes, rings, and shoes, and you could probably buy a full-size truck. She placed her handbag on the chair so the luxury logo was clearly visible, then sat down and asked, "What kind of arrangement did you want to discuss?"
She got straight to business the moment we met. Apparently, even Kwon Ho-gyun hadn't been on good terms with her.
"Going through the full legal process would be exhausting for both sides, so I wanted to hear what you want from us. Why did you file this complaint in the first place?"
"Business is already bad enough these days, and now they're demanding fifteen million won in franchise fees or whatever they're called. It made me furious."
"Isn't this too big a move just for venting? What did your lawyer say?"
"You said you wanted to negotiate, but you're really just trying to probe our strategy, aren't you? If that's the case, I'm leaving."
Well, I didn't need to ask Kwon So-hee about their strategy. Oh Il-mu had already given me plenty of information from her lawyers. She made a show of standing up, but when I didn't react, she awkwardly sat back down, pretending to adjust her posture.
"Want me to guess what your lawyer told you?"
"Go ahead."
"If you see this complaint through to the end, you have no chance of winning. But since the other side is the president of a well-known conglomerate, you might as well try to squeeze out a settlement. Something like that?"
She flinched, her face clearly flustered.
"I guess you didn't pass the bar exam just because of your uncle's connections. You're right. I needed the money."
"How much do you need? Fifteen million won?"
"No. That's just how much your brother is taking in franchise fees. With my kids' tuition and living expenses in the States on top of that, I need about fifty million right now. Will you give me a settlement?"
I let out a short laugh. She had started all this over a mere fifty million won. I was beginning to understand what kind of person Kwon So-hee was. She was the granddaughter of a chaebol family, covered in luxury goods and sending her children to study abroad in America, yet her actual income couldn't keep up with that lifestyle. She had serious money problems.
I shook my head at Kwon So-hee, who was watching my mouth anxiously, waiting for an affirmative answer.
"No."
Disappointment and frustration flashed across her face before she exploded in anger.
"What? You called me here to negotiate before going through the formal process, and now you're saying you won't settle? If you're not going to pay a settlement, why did you even call me?"
"I could give you the money. But it wouldn't be a settlement."
"If it's not a settlement, then why would you give it to me?"
"Because there's something I want to buy from you with that money."
Hope returned to her face, and she quickly asked, "Something you want to buy? What is it?"
"Haven't you been in contact with Kwon Je-gyun recently?"
"Huh? Oh. How did you know that?"
"I'm the lawyer handling this case. It's also a family matter. The truth is, I'm more interested in what you and Kwon Je-gyun talked about than in Kwon Seong-gyun's complaint."
While we were talking, the steaks we had ordered arrived. Kwon So-hee picked up her fork and knife and spent a long time thinking.
"If I tell you, you'll give me fifty million won?"
"Just telling me isn't enough. I want everything—messages, emails, any records you have. What do you say?"
"I do have the chat logs and emails on my phone, but what are you going to use them for?"
"I don't think someone who secretly colluded with the person who sued our family should inherit the company."
* * *
Kwon So-hee, who had been cutting her steak, fell into deep thought. From what she'd heard, the complaint she'd filed to squeeze some money out of Kwon Seong-gyun had grown into something much bigger. If it came out that Kwon Je-gyun had given her the corporate card usage records of QS Electronics executives, it would seriously damage his position in the succession race. Her lawyer had said the records could be submitted as leverage for a settlement but weren't strong enough as evidence of embezzlement, which had been disappointing. But now they could be useful in an entirely different way!
The email Kwon Je-gyun had sent her with those records was still on her phone. And Kwon Ho-gyun was offering fifty million won for it. But if the documents were valuable enough to affect the succession, couldn't she sell them for more? How much could she get from Kwon Je-gyun in exchange for not revealing the email? A hundred million? Two hundred million? Or maybe shares in one of the QS Group subsidiaries that Kwon Je-gyun held?
Kwon So-hee swallowed the meat in her mouth and shook her head at me.
"I'm not selling."
* * *
What? She had said she filed the complaint for money, and now she was refusing when I offered the exact amount she needed? I had been willing to help pay for my cousins' education out of goodwill, but if she didn't want it, there was nothing I could do.
"Is that so? Understood."
"Huh? Oh… okay."
She looked flustered when I agreed so readily. Had she expected me to raise the price if she refused? I had already learned what I needed to know—that Kwon So-hee possessed evidence that Kwon Je-gyun had leaked internal company documents. Even if she wouldn't hand it over herself, I had ways to obtain it.
"So how should we handle Kwon Seong-gyun's case? I'd prefer it if you withdrew the complaint. Are you willing to do that?"
"What about the settlement money?"
"I already told you—I have no intention of paying anything in the name of a settlement. As you know, this case is overwhelmingly in our favor. There's no need for us to admit to a crime that didn't happen."
"What if I don't withdraw the complaint?"
"Then we'll have to respond as aggressively as possible. I'm sorry to say this to your face, but we'll file a counter-complaint for false accusation, and we'll claim the legal costs we've incurred through civil proceedings."
Kwon So-hee's eyes trembled violently, as if she had suddenly realized the risk to herself. She hadn't considered that this lawsuit could backfire on her.
"I'll talk to my lawyer and let you know."
"Please do. And don't take too long. Since you've already filed the complaint, if the prosecutor moves forward with the case, we'll have no choice but to respond immediately."
"Understood."
That evening, two pieces of good news arrived. The first was a text message from Kwon So-hee.
"I talked to my lawyer. We're going to withdraw the complaint first thing tomorrow morning."
"Good decision. Thanks for making my job easier."
With no evidence in the prosecution's possession and the complaint now withdrawn, Kwon So-hee's embezzlement accusation against Kwon Seong-gyun would soon result in a non-prosecution decision.
The second piece of good news came from Yeo Eun-ju, the hacker who had been working closely with me since last week. When I opened the USB drive she gave me, it contained not only the conversation logs between Kwon Je-gyun and Kwon So-hee, but also evidence that Kwon Je-gyun had emailed the QS Electronics corporate card usage records. Once again, Yeo Eun-ju had delivered exactly what I needed, quickly and accurately. She also added that there was no need to worry about getting caught.
All that remained was to report this to Chairman Kwon Byung-do, and this matter would be settled. The only lingering question was why Kwon Seong-gyun had gone to such lengths to extract franchise fees from the dealership owners in the first place. This case had been relatively easy to resolve because Kwon So-hee had personally sued Kwon Seong-gyun for embezzlement. If she had instead reported QS Electronics to the Fair Trade Commission for violating fair trade laws, things would have become extremely complicated. The company might have been forced to refund all the franchise fees collected over the past two years, plus face fines several times that amount. The indirect damage from the blow to the company's image would have been significant as well.
Well, reporting to the Fair Trade Commission would have hurt QS Electronics badly, but Kwon So-hee wouldn't have been able to receive any settlement money from it. That was probably why she had targeted Kwon Seong-gyun personally with an embezzlement complaint. Still, Kwon Seong-gyun's actions were difficult to understand.