Battle for Control (2)
I asked Senior Dongho, “Have you finished the investment report?”
“Yeah. I just sent it by email.”
Half of the money we’d invested this time belonged to the Saudi prince. An investment firm had a duty to report back to its investors on how things were going.
I had no idea whether he actually cared.
The report laid out the trading history and changes in the portfolio in clear, orderly detail.
“Thanks for your hard work.”
“Hard work, my ass.”
But Senior Dongho’s face said otherwise. He looked happy.
And why wouldn’t he be? Hanjeong Mulsan’s stock was soaring. As shares vanished from the market at a rapid pace, the price kept hitting new all-time highs day after day.
Just looking at the account would have been enough to make anyone grin.
“Though I have to say, compared to when we were at the securities firm, this is pure luxury. Back then, we were so busy we barely had time to breathe.”
“That’s true.”
Memories of all the nights we’d worked overtime together came flooding back.
“What should we have for lunch?”
“How about jajangmyeon?”
“You’re treating me, right, Senior?”
“Why would I?”
“The stock’s gone up a lot.”
Senior Dongho nodded at once. “Fine. Order some sweet-and-sour pork too.”
While we ate, he asked, “So what are you planning to do now? You’re not seriously thinking of hiding in the shadows forever, are you?”
“Of course not.”
Honestly, I had considered it at first.
The more famous I became, the more troublesome things would get. That was why I’d put David Lockhart forward as co-CEO in the first place.
A mysterious investor in the shadows or a corporate hunter lurking in the dark sounded pretty good too.
...Or so I’d thought. But my mind had changed.
Because...
“These days, a hero who hides his power just isn’t popular.”
At my words, Sara tilted her head.
“What does that mean?”
“Just a joke.”
Either way, it was about time I made a move.
I told Senior Dongho, “After we finish eating, send Hanjeong Group an email.”
Hanjeong Group was in a state of emergency.
The employees couldn’t hide their unease.
“Continue Capital, right? The private equity firm that wiped out Thomas Motors with a single report.”
“And didn’t they also acquire the fourth-largest cloud company?”
“When did they start buying our stock?”
“How did they get to 9.2 percent without triggering disclosure?”
“What’s their goal? Are they trying to take control of the company?”
“What’s going to happen to us now?”
Thomas Motors had become so infamous that everyone had at least heard of Continue Capital and David Lockhart.
But the true nature of Continue Capital was still not properly known. Even on Wall Street, people were only speculating that it was backed by Jewish capital, oil money, or Chinese money.
Most importantly, they had filed only a simple disclosure of ownership without making their intentions clear.
Ju Cheol-jin had also been working to uncover Continue Capital’s true identity.
“Any progress?”
Managing Director Park Wonyong looked apologetic. “Not yet, sir.”
Ju Cheol-jin clicked his tongue inwardly.
We’re missing too much information.
His biggest concern right now was the relationship between Continue Capital, KSGI, and Elliant.
If Continue Capital joined forces with the bilateral alliance, their combined stake would come dangerously close to 30 percent. Add the shares held by defectors and minority shareholders, and it could edge up toward 40 percent.
If things went wrong, they really could take control of the company. That was the one outcome he absolutely had to prevent.
And then, in the middle of all that, an email arrived.
“What does it say?”
“They say Continue Capital’s Korean representative wants to meet you in person and talk.”
“Me?”
“What would you like to do?”
If they were the ones asking for a meeting first, then they clearly wanted something.
Money. It has to be money.
He didn’t hesitate for long.
“Set it up immediately.”
It was a hanjeongsik restaurant in Irwon-dong.
Following the staff’s guidance, I crossed the courtyard and headed into a private room. Inside, a man in his late forties was already waiting for me.
He had short hair and a sharp, angular face. His gray-streaked hair was neatly combed, and the eyes behind his glasses were small.
He looked similar to Ju Hyeon-jin, yet somehow very different.
His name was Ju Cheol-jin.
The vice chairman of Hanjeong Group.
In the original timeline, the merger plan between Hanjeong Mulsan and HJ Logis would have passed, and he would have inherited control without incident.
If that had happened, there would never have been any reason for us to meet like this.
I’d seen him plenty of times on TV, but this was my first time facing him in person. Honestly, I wasn’t nervous at all.
I’d met the chairman of Yuseong Group and even a prince from an oil-rich country. A successor from one of the top ten conglomerates wasn’t much to be afraid of.
Ju Cheol-jin extended his hand toward me.
“I’m Ju Cheol-jin, vice chairman of Hanjeong Group.”
I shook it.
He must work out regularly, because his hand was surprisingly heavy.
“It’s a pleasure. I’m Han Miru.”
When he heard my name, his expression shifted slightly.
“Han Miru? Don’t tell me...?”
It looked like he had realized something.
Anyone in the business world would probably have heard my name by now.
“I used to work at DA Securities until recently.”
He seemed briefly startled, then nodded.
“I see.”
He was probably running through possibilities at full speed in his head.
Why was I here, when I’d been the one to expose the Primus Fund scandal and walk away from DA Securities?
I cleared up his curiosity.
“After leaving the firm, I was lucky enough to make a connection with Chairman Lockhart and ended up joining Continue Capital. I’m currently working at Continue Capital’s Korea branch.”
“I see.”
After the greetings were over, we sat down.
“You said you were a representative. How much authority do you actually have?”
“As I stated in the email, I have full authority over this investment. I can make every decision myself without approval from headquarters.”
His eyes flickered with doubt.
It made no sense for some ordinary employee to determine the fate of an investment worth hundreds of billions of won. So naturally, he must have been wondering exactly what my relationship with Continue Capital was.
He certainly couldn’t imagine that I, who had only been an office worker a few months ago, had pooled together a fortune worth hundreds of billions of won and bought stock with it.
“You probably have a lot of questions, but let’s keep this to business for today. If you have anything to say to Continue Capital, you can say it to me.”
Ju Cheol-jin nodded.
“What is Continue Capital’s objective?”
“As disclosed, management participation. The shareholders of Hanjeong Mulsan have suffered severe losses because of the current management’s poor decisions. Our goal is to correct that.”
His expression changed slightly. “What basis do you have for saying that?”
I asked him back, “Then did you run the company well enough for the stock price to end up like that?”
“......”
At my words, his face hardened.
Before this dispute began, Hanjeong Mulsan’s market capitalization had been about 3.6 trillion won. Yet the assets it held alone were worth several times that amount.
It was true that holding companies tended to be undervalued relative to the assets they owned, but this was too much.
The reason was that they’d deliberately suppressed the share price in order to make the merger happen. If the stock had been high to begin with, it would have taken far more money to secure a controlling stake.
That would have lowered the expected return, and then it wouldn’t have become prey for the hedge funds.
In the end, their own greed had come back like a boomerang and hit them in the face.
“If a CEO runs a company transparently, grows the business consistently, and tries to return more profits to shareholders, no shareholder would want to see the management changed.”
In the case of White Road, they were sitting on $150 billion in cash, a third of their market cap, yet no shareholder was demanding that they spend it on dividends or buybacks.
They trusted management’s judgment.
The fact that a majority of minority shareholders had turned away meant that the owner family had been taking care of only their own interests, not those of their shareholders.
“What’s your relationship with Elliant and KSGI?”
“None at all.”
I added, “At least not yet.”
“So you’re saying there’s a chance you could form a relationship from here on out.”
“Think of it however you like.”
“Have you considered what happens if hedge funds take control of a company?”
I looked at him as if I didn’t know.
“What happens?”
“As always, they’ll start with restructuring. They’ll cut staff and shut down factories that aren’t profitable. How many people do you think will be hurt by that?”
For years, Korean conglomerates had expanded their affiliates in a spiderweb of cross-ownership and control.
From the group’s perspective, it had to keep supporting failing business units and affiliates in order to preserve its influence and maintain political ties. But hedge funds had no such obligation.
They didn’t have to worry about politicians or public opinion. They could simply restructure or sell off the loss-making divisions.
Then they’d be left with only the valuable assets, and use the money raised from sales to buy back stock or increase dividends, pushing the share price higher.
That was definitely good for shareholders.
But socially, it wasn’t necessarily so simple.
Shut down just one factory, and thousands of people could lose their jobs. What if there were large-scale layoffs or affiliate sales?
Of course local economies would take a severe hit.
That was why the government didn’t want hedge funds taking control of companies.
“I understand what you’re saying, but do we really have any reason to care?”
Ju Cheol-jin’s words sounded plausible, but when you looked closely, it was nonsense.
“A company isn’t a charity. It’s an organization that exists for a clear purpose: profit. And when I say profit, I don’t mean the interests of politicians or workers. I mean shareholder value. Besides, if restructuring increases a company’s profitability, couldn’t that money be reinvested to create even more jobs? If a factory gets shut down because it wasn’t needed, someone else will build one where it is needed and hire people there. And any affiliate that gets sold off will be handled properly by the company that acquires it.”
Ju Cheol-jin gave a bitter smile.
“So you’re saying Continue Capital intends to run the company itself?”
In truth, even if we handed over control, there was no one who could actually run it. And I certainly couldn’t take over the job myself.
“Whoever it is, it should be someone capable.”
Ju Cheol-jin glared at me.
“Hanjeong Group is a company my father and grandfather built with their entire lives.”
I nodded.
“I respect the effort and achievements of both men. But that doesn’t justify hereditary succession. In a stock company, isn’t it common sense that the person who earns the support of the majority of shareholders gets to run it? If you want to manage the company, Vice Chairman, the method is simple. Buy more shares and secure more voting rights.”
“So that means Continue Capital might be willing to sell the shares it holds.”
I shrugged.
“If the price is right, there’s nothing we can’t discuss.”
“And what price would that be?”
“How does 3 trillion won sound?”
At my words, Vice Chairman Ju looked downright stunned.
“Our purchase price was only around 300 billion won.”
“By that logic, Hanjeong Mulsan’s par value is 500 won. If I told you I’d buy all of it at par, would you sell?”
“......”
The price of a stock is ultimately determined by the needs of the person buying and the person selling.
“Why does it matter how much I bought it for? What matters is how much I want to sell it for. Don’t you think?”