The Primus Incident (1)
Park Tae-il, the CEO of Primus Asset Management.
He had been called the Midas Hand of the bond market, and true to that reputation, every investment he touched seemed to turn into a major success.
People trusted him gladly and invested their money, and he rewarded them with returns. But as his successes piled up, so did his greed.
There was a limit to the returns one could make by investing in safe bonds. So he turned his attention to privately placed corporate bonds from companies with lower credit ratings.
Compared with public bonds, private bonds were barely regulated at all.
The issuance rates were higher to begin with, and in the case of convertibles and bond warrants, if the company ever went public, it was possible to make returns in the dozens of times over.
Sometimes he posted profits of more than 30 percent, but since he claimed to invest only in Triple A-rated assets, it was enough to pay investors just 6 percent.
The rest, after those payments were made, he siphoned off through every method he could think of.
After a few investments struck gold, arrogance took root in him.
But...
The promise of huge gains was the same as the promise of huge losses.
When market conditions changed suddenly, those gains turned into losses in an instant.
The only way to cover them was to invest even more aggressively. So he started dipping into mezzanine deals in unlisted companies as well.
No matter how large the losses grew, he manipulated the management reports sent to the sales team and regulators, so on the surface nothing looked wrong.
Then, all of a sudden, a redemption request came in from an institutional investor.
To meet a redemption, he had to sell the bonds he held and pay out the cash. But at that point, even if he liquidated every asset in the fund, redemption was impossible.
So he decided to open another fund and bring in retail investors. Like rolling over debt with a credit card, he planned to use new money from individuals to plug the hole left by institutional money.
In the end, investing is all about one big hit. Conditions in the market have just been bad so far. If I land one win, I can cover the losses easily.
Fortunately, private funds were a regulatory blind spot, and no one suspected that Primus Fund was rotten. As long as new money kept flowing in, there was no immediate problem.
But those thoughts shattered the moment he saw the breaking news articles that had just gone up.
“Who the hell was it!?”
Park Tae-il read the report.
Han Miru?
He knew most of the analysts at DA Securities; he had even drunk with the head of the research department on several occasions.
And yet some unheard-of new hire had uploaded a report like this!
What was more, every point it raised was true, as if the writer had actually looked through the asset list. Even that was information a mere newcomer should not have been able to uncover.
How the hell did that brat figure this out? Did someone above him order it?
Which meant DA Securities as a whole might already be investigating Primus Fund.
The world went dark around him, and his hands and feet began to tremble.
At that moment, Executive Director Yang Jeong-uk called.
What am I supposed to do?
Park Tae-il pressed the call button with a shaking hand.
“Did you see the article?”
“E-Executive Director. This is, uh, what happened is...”
He was scrambling for an excuse when Yang Jeong-uk spoke first.
“I’m sorry, sir.”
“...What?”
“It seems one of the research department employees posted a report without permission and went rogue. I just heard about it myself, and I’m on my way back to the office. I have no words for you, sir.”
An employee acting on his own? So the people above didn’t catch on?
To hide how cornered he felt, Park Tae-il instead snapped back in outrage.
“N-no, is it even acceptable for the sales side to put out a slanderous report like that? You know I decided to grant DA Securities exclusive sales rights out of my connection with you, despite calls from other major securities firms. How are we supposed to keep working like this? I’ll respond strongly to this matter!”
“I’m truly sorry. I’ll confirm the details and take action right away.”
Even after the apology, he felt no relief at all.
If an investigation started, everything would come to light. That was the one thing he had to stop, no matter what it took.
Exposing a company’s rot was not unusual. But most such accusations sank without a trace.
It’s only a suspicion, and there’s no evidence yet.
On paper, Primus Fund’s assets were perfect. It was just that the assets listed on paper did not exist in reality.
All I have to do is avoid an asset audit.
Confirming transaction records and auditing the actual holdings took a great deal of time and was a complicated process.
From what he could tell, Executive Director Yang Jeong-uk had not caught on at all. If things blew up, he would not be able to escape responsibility either, so there was no way he would volunteer to launch an investigation.
They said that if you were dragged into a tiger’s den, you could still survive if you kept your head about you.
Wiping the cold sweat from his face, Park Tae-il said, “If you need any documents, I’ll send them over immediately. Please cancel the report and issue a correction.”
“Understood. Don’t worry.”
* * *
DA Securities was thrown into chaos by the sudden uproar that broke out during lunch hour.
As the articles poured in, DA Securities’ stock, which had been holding steady, suddenly fell more than 5 percent.
The company hurriedly deleted the report from its website, but by then the story had already been picked up by the media and was spreading through stock forums and the like.
Phones rang from every direction, and everyone was sweating bullets as they explained the situation to clients.
“It was an employee mistake. The fund has no issues.”
“Of course. This is safe unless America or Europe collapses. Think about it. Korea would go under before America or Europe would.”
“The fund’s insolvent? No way! There isn’t a safer financial product than Primus Fund.”
“We told you when you signed up, didn’t we? It’s the safest fund in the world.”
“The employee must have confused it with another fund and uploaded the wrong report.”
The PR team called the media and asked them to take down the articles, while drawing a hard line that the report had been nothing more than one employee’s personal mistake.
With the entire company in uproar, the blame poured down on the research department that had triggered the mess.
Department Head Yoon Yeong-cheol, who had been out of the office for a lunch meeting with the PR team of a major conglomerate, was stunned when he received Yang Jeong-uk’s call.
“I-I’m sorry, Executive Director. I’ll draft another report and upload it right away. I’ll handle this immediately so there won’t be any more problems.”
Yoon Yeong-cheol, who had run back to the office before he even finished eating, shouted in fury.
“Where the hell is Han Miru!? Bring him in here right now!”
* * *
I uploaded the report just before lunch, then left the company and went to eat.
Since this was Yeouido, everyone around me was talking about stocks, funds, real estate, and exchange rates even while they ate.
I had turned my phone off and hadn’t looked up any articles, but I could more or less guess what was happening by now.
I didn’t have much of an appetite, but I forced food into my mouth anyway.
If I wanted to do anything at all, I needed to fill my stomach first.
“If this had been the old me, I never would have imagined doing something like this.”
Back then I had been a good little employee. I just did what I was told from above. That was how I ended up the way I did.
But this time was different.
I took my time, even had coffee, and only headed back to the office just before lunch ended.
The moment I passed through the front gate, I could feel the air had changed.
The mood was completely different from when I had left for lunch. As I headed toward the research department, employees who recognized my face stared in surprise and started whispering.
I ignored them and returned to my department. There was an astonishing scene waiting for me, one I had never once seen since joining the company.
Like a disciplinary lineup, the entire department had been lined up in a row, and in front of them stood Yoon Yeong-cheol, his face red as a beet.
“Where the hell is Han Miru!?”
Dongho-senpai fidgeted anxiously and said, “I’m sorry. It looks like he turned his phone off.”
“Then go out and find him yourself!”
“Pardon?”
“Find somewhere he might go and drag him back by the collar!”
“Ah, un... ah!”
When Dongho-senpai looked over in shock and saw me, everyone turned their heads toward me at once.
Yoon Yeong-cheol glared the moment he saw me. He looked ready to slap me across the face, so I quickly bowed my head and turned myself in.
“I’m sorry, sir.”
“Sorry!? Do you even know what you just did?”
“Yes. The report was supposed to go up after approval, but I judged that it was urgent and uploaded it first. I’ll make sure nothing like this happens again.”
The department head looked like he could not believe what he was hearing.
“Th-that’s all you have to say for yourself?”
I blinked and asked back, “Did I do something else wrong?”
“The problem is the content! What the hell was that report!?”
I answered calmly. “Ah. That? It was exactly what I reported to you before.”
“What?”
“Primus Fund has serious insolvency problems. It needs to be halted immediately and audited.”
“You, you...”
Just as Yoon Yeong-cheol was about to shout, a sturdy man in his mid-forties appeared. He walked toward me with steady, assured steps.
It was none other than Executive Director Yang Jeong-uk.
Normally he was popular even with rank-and-file employees for his easygoing manner and friendly face, but now he wore a cold expression I had never seen before.
No one could speak after his sudden appearance.
He said to Yoon Yeong-cheol, “You really should manage your staff better, Department Head. If you can’t even keep one subordinate under control, how do you expect to handle anything bigger?”