Sarah Avery (1)
Sarah explained her relationship with Crown Prince Rashid to me.
The House of Saud had originally been just one of the tribes on the Arabian Peninsula. During the founding of modern Saudi Arabia, the kingdom’s first king sought to stabilize the new state by marrying the daughters of various tribal chieftains across the peninsula.
He was said to have married roughly three hundred times.
With so many wives came so many children. There were too many of them to give each one a proper place in the royal order.
Some inherited the throne or secured important government posts, but most were simply given a modest share of wealth.
Among them were people who abandoned royal status altogether and chose to live their own lives.
Sarah’s father, Amin, was one of them.
He went to study in the United States when he was young and fell in love with a woman there. He was never particularly close to power to begin with, and life in Saudi Arabia had always felt stifling to him, so even after earning his degree he never went back. Instead, he married and settled in America.
“My father’s only royal in blood. He’s really just an ordinary man. He even took my mother’s last name when he got married as a way of becoming Avery.”
Crown Prince Rashid had been educated in the United States as a child, and that was where he met Amin, who was working as a professor, along with Sarah, his cousin.
“Rashid was away from the rest of the family and alone, so we became close quickly—almost like real siblings.”
Close like siblings with the future ruler of Saudi Arabia!
Someone might have thought it wasn’t such a big deal for cousins to get along, but the Saudi royal family had fifteen thousand princes and princesses at the moment.
How many of them could possibly stay close to someone in power?
I looked at the beauty standing before me and thought about it.
At her age, she was already a CFO.
Even in Korea, it wasn’t unheard of for people in their twenties to become directors at major corporations. Strangely enough, they all happened to have one thing in common: their fathers were the chairmen.
It was no doubt thanks entirely to Crown Prince Rashid’s backing that she had become CFO of A-Oil at such a young age as well.
And now he wanted to place her beside me as a watchful eye?
I couldn’t say I liked the idea. If she was the meddlesome type with no real ability, that would only become a nuisance.
Then, all at once, her face felt oddly familiar. I was pretty sure I’d heard her name before, too.
Where had I seen her?
“Ah….”
I remembered.
Sarah Avery, head of Saudi Arabia’s sovereign wealth fund overseas investment division!
At present, the Saudi sovereign wealth fund was worth about 350 billion dollars.
Because Saudi Arabia was rich in natural resources, the sovereign wealth fund invested most of its assets overseas. Which meant the head of overseas investment was, in truth, effectively in a position to control the fund itself.
After Rashid seized power in a coup, he placed his own people throughout the fund and dramatically increased overseas investments.
Most of that money went into the IT sector, and she was the one overseeing those investments.
Working with Insight Fund, she bought up semiconductor, battery, electric vehicle, and AI-related companies and made an enormous profit.
Thanks to years of experience working in a Korean conglomerate, she knew the Korean market well, and she later visited Korea many times to make large-scale investments there as well.
Her outstanding investment skill, combined with her stunning looks, made her famous around the world. Every now and then, she even showed up online as “what a typical sovereign wealth fund manager looks like.”
So at this point in time, she was the CFO of A-Oil.
She looked at me and said, “Shall I guess what you’re thinking right now?”
“Pardon?”
“You’re thinking that my position as director at A-Oil is entirely thanks to Rashid, aren’t you?”
“……”
That hit a little too close to the mark.
She probably got that kind of look from people all the time. If I hadn’t known the future, I would have thought the same thing.
I quickly shook my head.
“No. The opposite, actually.”
“The opposite?”
“I thought it was because you’re capable enough to deserve it.”
Sarah asked, sounding genuinely puzzled, “Why would you think that?”
Because I knew how high she would climb in the future, and what kind of ability she would show once she got there…
I answered calmly. “At the very least, Rashid doesn’t seem like the kind of man who’d give a position to someone without ability. A CFO is an important post—someone who can see a company’s cash flow at a glance. If Rashid entrusted you with that role, doesn’t that mean you’re capable enough for it?”
She looked surprised.
“You really think so?”
“Of course.”
Her abilities were already proven, in all but name.
Apparently pleased by my answer, she smiled.
“Rashid wanted me to go to Aramco, but I chose A-Oil instead.”
“Why?”
“I wanted to build experience at a smaller company.”
“……”
Since when was A-Oil a smaller company?
Well, if it ranked eighteenth among Korean conglomerates, I supposed it was smaller, at least by that standard. It was a subsidiary of Aramco, after all, and its market cap was less than one three-hundredth of Aramco’s.
If Aramco was Starbucks, then A-Oil was probably more like a neighborhood café.
Either way, the fact that he had installed her as CFO meant Rashid’s influence reached even into A-Oil.
He probably had more than one or two people planted like this.
“I’ve got a question for you, too.”
“What is it?”
She asked with sparkling eyes, clearly interested.
“How did you win over Rashid’s heart? I heard you performed alchemy right in front of him.”
“Haha.”
At that, I couldn’t help laughing.
After all, I had bought a painting for peanuts and sold it for 150 million dollars. Calling that alchemy was probably meant as a compliment.
“My brother doesn’t trust people easily. The number of people he truly trusts can probably be counted on one hand.”
There must be flattery and scheming everywhere around him, and since he was planning a coup, he couldn’t afford to trust just anyone.
“I suppose that includes you, Director.”
Sarah answered my remark with a smile.
“According to my brother, he thought it would be fun to work with Mr. Miru.”
Fortunately, I must have left a good impression that day. Which was probably why he bought the painting and made the investment in the first place.
She got to the point.
“I heard you’ve been buying up shares of Hanjeong Mulsan.”
“Yes.”
With the 150 million dollars I had received from selling the painting, I had begun purchasing Hanjeong Mulsan shares. I’d also asked Rashid to do the same.
The 150 million dollars that would be invested in Continue Capital would later come into the company’s account through Hanjeong Mulsan shares.
“Why Hanjeong Mulsan?”
Hanjeong Mulsan was a conglomerate whose businesses included construction, hotels, resorts, real estate leasing, import and export, and various venture investments.
But the most important fact was that it was the holding company of Hanjeong Group.
“If you worked in Korea for two years, then you’d know a thing or two about chaebol governance.”
She nodded.
“To a certain extent, yes.”
Hanjeong Group was a conglomerate ranked tenth among Korea’s chaebols. It controlled more than sixty subsidiaries across construction, resorts, heavy industry, energy, entertainment, food, and distribution.
“Right now, the founding family’s situation isn’t exactly good.”
For years, Korea’s chaebol leaders had committed all sorts of crimes and then lowered their heads in the photo line before the cameras.
Among the heads of the top ten groups, it was easier to find someone who hadn’t been sentenced to prison than someone who had.
Among them, Hanjeong Group was practically the textbook example of what happens when a founding family runs wild. Embezzlement, breach of trust, unfair internal transactions, verbal abuse, physical assault, abuse of power—on and on.
Chairman Ju Min-jae was currently on probation for embezzling 120 billion won in company funds, and Vice Chairman Ju Cheol-jin was on trial for tax evasion and breach of trust through paper companies.
As if the economy weren’t bad enough already, both the chairman and vice chairman—who should have been focused on management—kept getting dragged into court and splashed across the news, and the stock price had been sliding ever since.
“Hanjeong Group grew through aggressive mergers and acquisitions, and if you add up the founding family’s shares, they don’t even come to six percent. During the process of untangling the circular cross-holdings, they converted Hanjeong Mulsan into the holding company and shifted to a structure where it controlled the rest of the affiliates. But even now, if you look only at the family’s holding company stake, it’s still under ten percent.”
“Even so, with friendly shareholders, they shouldn’t be in danger of losing control.”
“Ordinarily, yes. But right now the founding family is on trial, and Chairman Ju Min-jae is old, while his son, Vice Chairman Ju Cheol-jin, is in the middle of inheriting management. For a stable succession and smooth governance, they need to increase their stake in the holding company.”
She showed real interest in what I was saying.
“You mean the founding family will use their personal assets to buy shares?”
“They probably don’t have that kind of money.”
Chaebol families might be rich on paper, but most of their wealth was locked up in stock, not in actual cash. The money they splurged with was, on closer look, the company’s money anyway.
I added one more thing.
“And Korean chaebols don’t usually use normal methods like that.”
“Then what do they do?”
“They usually find a loophole.”
“I’d like to know what kind.”
“They’ll merge the holding company with one of the affiliates.”
The biggest defining traits of Korean chaebols were family-run management and sprawling, octopus-like expansion.
Once a group became one of the top ten, it usually controlled dozens of listed companies and hundreds of unlisted ones. No matter how many affiliates they had, it wasn’t a problem if the founding family’s stake was large enough.
But when their ownership was small, even the slightest crack could shake the whole structure. There had, in fact, been several occasions when foreign hedge funds attacked them.
The governance issue at Hanjeong Group was an old, stale problem.
Just the scenarios I had seen while working at DA Securities numbered more than ten.
Predicting mergers or spin-offs between affiliates within a conglomerate was practically an exercise in screenwriting, and it was not easy to get right.
But once you already knew the outcome, fitting the pieces together was simple.
“With which company?”
“Hanjeong Mulsan, the holding company, and HJ Logics.”
In order to transfer wealth from parent to child, a family had to use gifting or inheritance, and taxes were imposed on those transfers.
That was why chaebols developed all sorts of creative ways to pass wealth to their children without paying taxes.
The most representative method was unfair internal transactions.
They would gift a small amount of capital so the child could establish a company, then funnel all the affiliates’ business to that company.
In that way, revenue and profits grew at a speed no one could believe possible for a startup.
Of course, since it was essentially moving a parent company’s assets into the child’s company, it counted as breach of trust.
The government knew how serious the problem was, so it introduced all kinds of regulations. But no matter how many regulations you made, there were always plenty of ways around them.
A company founded by the heir of Group A would do business with Group B, while a company founded by the heir of Group B would do business with Group A.
HJ Logics was one such company built on unfair internal transactions. Its largest shareholder was the heir, Ju Cheol-jin.
The merger between Hanjeong Mulsan and HJ Logics was the most important step in Hanjeong Group’s succession.
“Vice Chairman Ju Cheol-jin holds 2.3 percent of Hanjeong Mulsan, while his stake in HJ Logics is 25.1 percent. If the two companies merge, he can raise his stake in the merged company to nearly twenty percent.”