The FSS, Part 2
As the Primus affair, Cobalt Gate, and one financial scam after another exploded in rapid succession, the Financial Supervisory Service had become less an object of criticism than a punch line.
And then, with the country already in that kind of mood, another massive scandal broke out: the Hanjeong Group management rights battle.
Compared to that, the first two incidents barely counted for anything.
The Hanjeong Group fight had domestic private equity funds, overseas private equity funds, minority shareholders, foreign investors, the National Pension Service, and even the Blue House all tangled up in it.
With things like this, Jang Jinhaeng, the head of the FSS, had received subtle pressure from the Blue House.
KSGI was a homegrown private equity fund that had spent years building its base in Korea. On top of that, since Kim Sung-gwon was leading the three-way alliance, it was hard to lay a hand on them directly.
Elliott Management was a famous activist hedge fund even in the United States. With its history, its tradition, and its influence over American capital sentiment, it was also not something anyone could easily touch.
In the end, the easiest target was Continue Capital.
There was the least amount of publicly known information about us, and there were more than a few suspicious points. So they had started with a request for documents as a warning, and then—wouldn’t you know it?
After receiving a direct report from Assistant Manager Han Jongwon, Jang Jinhaeng was furious enough to see red.
“What? A salary thief? He told us to go catch real financial criminals? That little punk has no respect for the FSS whatsoever!”
The FSS was the agency that supervised and regulated every financial institution in the country. No matter how successful a company was, it usually ended up kowtowing before the watchdog.
Who in the world had ever talked back to the FSS like that?
I hadn’t expected them to hand over every document willingly, but I had never imagined they’d respond like this.
We couldn’t just swallow an insult like that and back off.
Jang Jinhaeng forced down his anger and thought it over carefully.
If they flat-out refused the document request, that means they have a lot to hide, doesn’t it?
If we investigated, something would definitely turn up.
And if we could uncover even a bit of illegal activity in the process, we could feed it to the press and swing public opinion.
Scrape the surface long enough, and something is bound to come up.
If anything appeared at all, we could hand it over to the prosecutors and get them indicted. Even if they were eventually found not guilty, the verdict wouldn’t come until after the shareholder meeting was already over.
Jang Jinhaeng issued the order.
“Proceed with the raid immediately.”
I called Kim Sung-gwon first.
“So the FSS has stepped in too. Some time ago, they asked Elliott for documents over a similar issue. We submitted everything they wanted, but they still twisted it into alleged illegal activity. As far as I know, the prosecution is now preparing to indict.”
“Well, even if it was legal, it was still close enough to a loophole to raise eyebrows.”
“The FSS will probably try to pry into Continue Capital with the same method. What do you plan to do?”
He was probably worried about public opinion turning against us because of this.
I reassured him.
“Don’t worry. Like I told you before, we’ll handle this cleanly on our end. Elliott won’t end up indicted either.”
“Understood.”
After I arrived at the office, I told everyone what had happened yesterday while we were all gathered together.
Kim Beom-seok blinked at me and asked, “The FSS came looking for you?”
“Yeah.”
His expression practically said, Did you choose way too dangerous a first job?
Dong-ho senior looked shocked.
“This is no small matter. You know how terrifying the FSS is, right?”
“I do.”
Anyone who had ever worked at a securities firm had at least heard of the FSS’s infamous reputation.
Dong-ho senior shook his head and said, “After the Primus affair, they came by to investigate and it felt like an occupying army had marched in. Some low-level employee was shouting at people, and the manager just stood there not daring to move.”
That was how frightening an investigative agency could be.
Sarah asked, “What was the basis for the FSS stepping in?”
“The TRS issue, for now.”
“If there’s suspicion, they can certainly request documents, can’t they? Why didn’t you comply?”
“Because it would’ve been pointless either way.”
TRS sat in that murky borderland between legal and illegal. In other words, it was the sort of thing you could pin on someone if you wanted to, or let slide if you didn’t.
I thought back to the first timeline.
In the original course of events, this was the point where the Hanjeong Group side and the two-firm alliance fought over the merger proposal. The National Pension Service sided with Hanjeong Group, while the government used the FSS and the prosecution to pressure the alliance.
Back then, the target had been Elliott Management.
The FSS had demanded TRS-related documents, and Elliott had complied. After receiving the materials, the prosecution decided there had been illegal activity and indicted them immediately.
The media then broadcast it everywhere, painting it as “the illegal, malicious, and unjust conduct of foreign speculative capital.”
So what happened in the end?
After a trial that dragged on for more than five years, the court found them not guilty. There had been no illegality in the TRS transactions, and Elliott Management had invested by perfectly legitimate means.
Elliott Management had protested fiercely, of course, but by then the merger had already gone through.
This time, the situation was the same.
“Whether there was anything illegal or not, the prosecution will probably indict them based on the FSS’s findings. The media will run with it as another case of illegal foreign speculative capital, and by the time the verdict comes down, nobody will be paying attention anymore.”
Dong-ho senior nodded. “Yeah, that sounds about right. If the president had taken a bribe, they’d be looking for something to do. So what’s the fix?”
“We need to make it clear that the place that bought the shares and passed them along isn’t some easy target they can just push around.”
As I said that, I looked at Sarah.
She nodded at once.
“I understand.”
She was Saudi royalty, and behind her stood Prince Rashid.
Once they realized Saudi royal connections were involved, they’d drop the idea of a convenient, trumped-up indictment.
“Couldn’t you have told them that in advance? Did you really need to provoke a raid?”
I shook my head.
“If I’d done that, they would’ve targeted Elliott instead of Continue Capital. Either way, the point was to shift public opinion.”
Sarah looked impressed.
“Ah, I see. They have to be humiliated once so they never try anything like this again.”
“Exactly. I’ll need a few documents from you. It’ll be more convincing if they come from your side than from ours.”
“All right.”
We prepared in advance for the raid.
The office had regular work computers as well as personal ones. When there wasn’t anything urgent to do, everyone used them for games, online lectures, or music work.
I looked at Dong-ho senior and said, “Get your documents organized. And if you’ve got any porn on there, delete it before they come.”
Dong-ho senior gaped at me. “Hey! What do you take me for?”
Even as he said that, he hurried back to his seat and started typing furiously.
Deleting the bird folder, are we?
By the time lunch rolled around, a group of men in suits came barging into the office. The man in front was the same one I’d seen yesterday.
He held up his badge and said, “Han Jongwon, special judicial police officer with the FSS. Don’t touch anything and step back.”
Just as I’d suspected.
The FSS had originally only handled investigations, while the police or prosecutors conducted the actual criminal inquiries.
But because financial crimes required speed, the law had since been amended to allow the FSS to investigate on its own.
It was called the special judicial police system.
Dong-ho senior muttered under his breath, “Seriously? They came all the way here to a tiny office like this just to investigate?”
Kim Beom-seok, standing beside him, said in a voice loud enough to be heard, “They’re not investigating because there was illegal activity. They’re investigating so they can find illegal activity.”
“At this rate, anyone would think the president had really taken bribes.”
Han Jongwon ignored the comment and said to us, “Show me your IDs.”
I handed mine over and said, “Is the FSS really that idle? Enough to go storming into a company with only a few employees? Even right now, financial scammers are probably running wild.”
He answered in a cold voice, “This is a lawful investigation. Please cooperate.”
Sarah also handed her business card to the investigator.
When he saw it, he looked startled and relayed something to Han Jongwon, who then asked Sarah in English, “CFO of A-Oil? You work for A-Oil?”
“Yes.”
“Then what brings you here?”
“I’m serving as an external auditor.”
“So you’re connected to this investment. Then please cooperate with the investigation.”
“I need to get back to the company.”
“That won’t be possible.”
Then Sarah took out her phone with deliberate calm.
“What are you doing?”
At Han Jongwon’s question, she replied coolly, “I’m just going to make a quick call.”
The investigators rummaged through the office and started working through the computers.
I asked Han Jongwon, “Do you really need to go this far?”
He gave me a thin, ugly smile. “Didn’t I tell you that you’d regret this? If you’d just complied with the document request, none of this would’ve happened. Should’ve listened to me.”
Judging by the way he said it, he’d been nursing yesterday’s humiliation the whole time.
I shrugged. “Would it really have changed anything? You’d have found some excuse to pick at us either way.”
He was about to say something when the phone in his inner pocket started ringing.
I said to him, “What are you waiting for? Answer it.”
“I don’t take calls while I’m working.”
“You never know. It might be an urgent call from above. At least check who it is.”
He stared at me for a moment, as if asking what kind of trick I was up to.
He could always check for himself, couldn’t he?
In the end, curiosity won out. He slipped the phone out of his pocket and, when he saw the caller ID, his eyes went wide. He answered immediately.
“This is Han Jongwon. Yes? Wh-what do you mean by that? Then the raid is... Yes! Understood. Yes, yes. I’ll do that.”
When he finished the call, he glared at me for a long moment.
I met his eyes without flinching.
“What did you do?”
“You can ask that when you get back.”
“……”
“So? Are you still going to keep this up?”
He gave the order in a drained voice.
“Withdraw.”
The investigators who had been searching the office froze in confusion.
“Excuse me? What do you mean by that?”
Han Jongwon barked, “I said withdraw, now!”
I looked at the angry man and said, “I told you already. I don’t do regret. Should’ve listened to me.”
“……”
After that, President Oh Young-hwan received a report from Jang Jinhaeng.
“What did you say?”
“We’ve received all the documents related to the TRS. But the Saudi ambassador, Ahad, called and asked why we were investigating.”
For a second, I thought I’d misheard him.
It was that abrupt, that out of nowhere.
“Why would the Saudi ambassador be involved?”
“The father of the woman overseeing the current investment audit, Sarah Avery, is said to be a professor from the Saudi royal family.”
“So she’s royalty?”
“Yes. She’s a naturalized American now, and she was born in the United States, but it seems she still has ties to the Saudi royal family.”
Honestly, being royalty by itself wasn’t such a special thing. Saudi Arabia had so many royals you could almost trip over them.
But if the embassy itself had stepped in to protect her, that meant the line ran straight to power.
At that moment, something clicked in my head.
“Then Continue Capital is connected to the Saudi royal family?”
“Yes. According to the documents, the company that transferred the shares through TRS is a private equity fund tied to the Saudi royal family.”
That made President Oh Young-hwan visibly startled.
“What? Why are you telling me this now?”
Jang Jinhaeng looked flustered as well.
“We only got the documents during the raid.”