Battle for Control (5)
With the merger dead, Chairman Ju Min-jae’s retirement announcement, his collapse at the press conference, and Continue Capital’s holdings disclosure all piling up at once, Hanjeong Group felt like a house already dressed for a funeral.
But the real mourning was only just beginning.
The merger had been canceled, yes, but the shareholders’ meeting would still go ahead as scheduled. There were other motions on the table, including director appointments, and those were no less important.
KSGI representative Kim Sung-gwun, who had remained silent after the merger was scrapped, finally held a press conference.
When reporters asked what the next step would be, he said in a hard, unwavering voice: “This merger was an illegal and malicious gamble to hand down control within the chairman’s family. Through this incident, it has been confirmed that the controlling family treats the group like private property rather than something that belongs to the shareholders. It is absurd that directors who already caused enormous damage to shareholder assets through embezzlement and breach of trust are still sitting on the board. To demand severe punishment for any act that destroys shareholder value, I will submit a motion at this shareholders’ meeting to set the qualification for inside directors as ‘a person who has not received a final sentence of imprisonment or heavier.’ The owners of a corporation are the shareholders, not the chairman or his family. KSGI will move actively from here on out to protect shareholders’ rights.”
The statement was shocking in every sense of the word.
Chairman Ju Min-jae was currently serving a suspended sentence, and Vice Chairman Ju Cheol-jin was still on trial. In other words, Kim Sung-gwun was effectively saying that he intended to drive the controlling family out of the company.
Elliott Management backed him as well, lending even more weight to the declaration.
“In corporate management, the ethics of those in charge are a very important issue. Excluding executives with criminal records from management is a global trend.”
What had begun as a dispute over whether to approve or reject a merger had now swollen into a full-scale struggle over control of the company.
The media broke the story everywhere at once, and Hanjeong Mulsan’s stock surged yet again.
If this had happened before, the media would have taken Hanjeong Group’s side and painted the private equity funds as pure speculation capital. But with public outrage already boiling over from a string of scandals, it was hard to find a single one-sided article openly defending them.
As soon as the announcement went out, the stock price soared, and the bulletin board where retail shareholders gathered erupted into a frenzy.
In Seongsu-dong, inside one of the mixed-use apartment buildings, Sara had just returned home, showered, and settled onto the living room sofa.
When she first moved in, she had thought the place was far too large for one person, but by now she had grown used to it.
She was gazing quietly out over the night view of the Han River when her phone rang. After checking the name on the screen, Sara answered with a bright smile.
Sara: “It’s been a while, brother.”
Rashid: “Are you doing well?”
Sara: “Of course.”
The person on the other end was Crown Prince Rashid.
The two of them were cousins, but in practice they were no different from real siblings.
No, it would have been fair to say they were even closer than that. Rashid had more than a hundred brothers and sisters. He didn’t even know the faces and names of many of them.
Even the siblings born from the same mother had never been as close to him as Sara was.
He was saying that Korea was in an uproar over the Hanjeong Group dispute, and that President Oh Young-hwan was in quite a difficult spot.
Sara asked in surprise, “You were paying attention to that?”
Rashid: “I invested $150 million. How could I not pay attention?”
At that, Sara burst out laughing.
One hundred and fifty million dollars was an absurd sum even for people who had money. But from his perspective, it wasn’t all that painful a figure.
It’s not the money he’s worried about. It’s the people.
Rashid asked, “How’s work?”
Sara smiled.
“Honestly? It’s fun.”
She had thought she had learned everything she could at A-Oil. That was why she had been considering moving over to the Saudi sovereign wealth fund side in the United States.
Then Rashid suggested that she meet Han Miru.
When he first made the suggestion, she hadn’t been very interested.
From the way he had been described, he sounded like a con man. And she had seen more than a few smooth-talking swindlers in her time.
But after meeting him in person, her opinion changed.
Who would have thought he was trying to take control of one of Korea’s top ten conglomerates?
“I’m surprised too. At first, I thought the goal was only to block the merger proposal.”
Even KSGI and Elliott Management probably hadn’t thought this far ahead.
And yet Han Miru had kicked the political world into motion and made the impossible possible. Who could have imagined the battle would grow this large?
Maybe all of this was only the beginning.
“I’ve started wondering what he’s going to do next, and what kind of future he’s trying to build.”
Rashid was a little shocked inside.
This was the first time his cousin had ever shown this much interest in someone.
“What should we do about the position we prepared in the United States?”
Sara thought for a moment, then shook her head.
“As disappointing as it is, I’ll pass it to someone else. I think I need to stay in Korea a little longer for now.”
The contract had been drawn up in both Korean and English.
I read the Korean version carefully, then sent the English version to David and had him review it.
We both signed electronically, and just like that, we were on the same team.
Hanjeong Group immediately tried to paint us as corporate raiders and appeal for support from politicians and public opinion.
In response, Kim Sung-gwun kept issuing press releases day after day, pointing out one flaw after another in the controlling family’s behavior.
“A corporation must put shareholders’ interests first. That is common sense.”
Hanjeong Group fired back as well.
“To return value to shareholders, we will raise our dividend payout ratio to 60 percent starting this year. We will also secure funds by selling non-core assets and use them for treasury stock buybacks and dividends. Going forward, Hanjeong Mulsan will continue to make every effort to enhance shareholder value.”
It felt almost like watching a contest over who could give away more.
The shareholders let out cries of joy.
Inside the president’s office, once the situation had been laid before him, President Oh Young-hwan gave a dry laugh.
“So this bastard is acting as Continue Capital’s representative?”
He had thought the name sounded familiar, and once he saw the photo he remembered exactly who it was. It was the bastard who had recklessly exposed the Primus Fund scandal and left the Financial Supervisory Service in a bind.
And now that same bastard had appeared under the title of Continue Capital’s representative.
They were the ones who leaked the K-Culture Foundation matter to the press. That much is obvious.
At first, he had thought it was unlikely to be KSGI or Elliott Management.
That was because the two of them had been dead set against the National Pension Service voting in favor from the very beginning. If they had known about the deal between Hanjeong Group and the K-Culture Foundation, they would have used it as a bargaining chip much earlier.
The fact that they hadn’t meant that, in the end…
It was something Continue Capital did.
Of course, there was no way Han Miru, who had only recently been an ordinary office worker, had gotten his hands on information like that on his own.
There had to be someone else behind the intelligence and the capital.
Still, how on earth did he figure that out?
If it ever came out as fact, his political life would be finished.
Fortunately, he was always cautious and suspicious by nature. Even if the relationship between the K-Culture Foundation and Hanjeong Group could be uncovered, proving the connection between the foundation and himself would be difficult.
Even so, this had already dealt him an enormous political blow.
Who exactly was behind this, and how much did they know?
“I’ll need to find out.”
He was the president of this country.
There were plenty of ways he could use.
Looking at Han Miru’s photo, President Oh Young-hwan murmured to himself, “A kid like that will spill everything he knows if I put a little pressure on him.”
I walked toward the office, partly to clear my head.
If the National Pension Service stayed out of the shareholders’ meeting, that left 90 percent. If I estimated the ratio of actual participation votes at 80 to 90 percent, then the effective valid votes came out somewhere around 70 to 80 percent.
If I secured a majority of that, the motion would pass.
Elliott Management: 11.4 percent. KSGI: 7.7 percent. Continue Capital: 9.2 percent.
Add it up, and that made 28.3 percent.
Throw in the votes from foreign shareholders and retail shareholders, and…
“It’s a little tight.”
They had just as much riding on this as I did, so they’d bring every tool they had to bear in defense. At this point, neither side could honestly claim victory yet.
Fortunately, I wasn’t out of options.
Just as I entered the building, a man stepped in front of me and blocked my path.
“Are you Han Miru?”
“That’s me.”
“Could I have a moment of your time?”
The man looked to be somewhere in his late forties or early fifties. He wore casual clothes and hiking shoes, and his hairline had receded a little.
Maybe because of his round eyes and broad, hearty face, he had a friendly, easygoing look about him.
I looked more closely, thinking he might be someone I knew, but I didn’t recognize him.
“What can I do for you?”
The man took a business card from his wallet and held it out to me.
“I’m from the FSS.”