Primus Fund (1)
The disaster would strike about two years from now.
By then, the Primus Fund would have sold more than 300 billion won’s worth. As the marketing spread by word of mouth, not only institutional investors, corporations, and high-net-worth clients but ordinary customers, too, poured in large sums of money.
Then, at some point, redemptions suddenly began to stall. Primus explained that it simply took time to liquidate the fund’s assets, and people believed them.
But even after months passed, the money still wasn’t coming back, and suspicions began to spread that the fund was being propped up with new money. The Financial Supervisory Service launched an on-site inspection, and an accounting firm conducted a due diligence review of the fund.
The result was shocking beyond words.
The claim that it invested only in receivables from public institutions in advanced countries was a lie, and the fund was packed with all manner of junk assets.
Evidence also emerged that management had embezzled fund assets. The stated valuation was 320 billion won, but the actual remaining assets were barely 50 billion.
In other words, it was a fraud, and the worst financial scandal since the Busan Savings Bank disaster.
Once the investigation began, the company shut its doors, and CEO Park Tae-il vanished.
The defining feature of financial crime was that the losses were enormous and the victims numerous. Investors who had lost their money swarmed DA Securities, the company that had sold the fund, to protest.
Small business owners who had put in the savings of a lifetime, young people saving for marriage, retirees who had invested their severance pay, housewives who had sunk in life insurance payouts from their husbands’ deaths—people from every walk of life.
DA Securities insisted that they had merely been the selling firm and that Primus Asset Management bore the obligation to compensate the victims, but there was no way that argument would hold.
The Financial Supervisory Service recommended that DA Securities reimburse the victims at a rate of 70 percent up front. But the scale of compensation was far beyond what a securities firm could possibly bear.
Even at 70 percent, the total exceeded 2 trillion won, and even if DA Securities liquidated all its assets, it still would not have raised 1 trillion.
The victims demanded support at the level of the DA Financial Group.
But there was no way the entire group could risk itself just to save one affiliate. The shareholders naturally objected, and the executives felt the same way.
DA Financial Group formally announced that it would not support DA Securities, and the victims’ path to compensation vanished.
Countless families were ruined, and more than twenty people took their own lives.
Among them was a researcher at a chemical company, which made the tragedy all the more terrible.
After losing everything he had spent a lifetime saving, the man watched his wife, crippled by depression, leap from an apartment building. He then loaded a truck with flammable and toxic substances he had secretly siphoned out of the factory and rammed it straight into DA Securities headquarters.
The flammables exploded in a chain reaction and triggered a fire. The building was swallowed by flames, and toxic gas spread in every direction.
The sprinklers activated, but they were no match for the blaze.
192 casualties. Of those, 112 were dead.
Most had suffocated after inhaling toxic gas. Many of the survivors suffered severe respiratory damage.
It was the worst disaster in the history of the Korean financial market.
Just remembering it made a suffocating fear rise in my chest.
When I’d inhaled smoke and collapsed unconscious, Senior Dongho had hoisted me onto his back and dragged me out, barely saving my life. In the process, he had suffered burns and damaged his bronchial tubes, leaving him disabled.
Thanks to him, I survived. The others did not.
Too many people died.
My cohort from the company, a senior from school, colleagues from other departments I used to eat lunch with, the security guard I always greeted in passing—so many faces came to mind.
The incident had stirred up the public for quite a while.
Some people left memorial comments, while many others spewed vicious abuse.
The person who committed the crime was a victim who had lost his entire fortune after investing in the Primus Fund and had even lost his wife. He had died at the scene as well, so there was no point in resenting him.
After that, I suffered through a horrific trauma for a long time. It wasn’t just guilt over being the only one who survived.
The real reason was....
I was the one who wrote the monthly recommendation reports for the Primus Fund.
I hadn’t known either.
The company had said the Primus Fund was safe, and I had simply taken them at their word.
But could I escape responsibility just because I hadn’t known?
It was reported that many individual victims had invested after trusting the recommendations of branch staff.
The reports I produced were used for sales and promotion, and countless people must have looked at them and decided to invest.
In other words, someone’s life may have been ruined because of me.
Back then, I’d been ignorant and written recommendation reports just as I was told. But this time was different. Now I knew it was a fraud.
If I knew the future....
Maybe I could change it.
I started by reviewing the list of assets the Primus Fund had purchased.
Unlike stocks, whose value fluctuated constantly depending on corporate performance, bonds had fixed yields and maturities.
Every asset in the Primus Fund was rated AAA.
According to the portfolio composition, they were all bonds issued by municipalities and public institutions in advanced countries such as the United States, Germany, France, and the United Kingdom.
In other words, unless the countries themselves went under, the chance of default was effectively zero.
The fund’s three-month return was 1.6 percent, and its return for the previous year was 6.2 percent.
There were plenty of stock funds, and even bond funds, that earned higher returns than that. But the Primus Fund had achieved those numbers while investing only in high-grade bonds with no default risk.
It was as safe as a bank deposit, yet word spread that its returns were higher than bank interest, and from there it had sold like wildfire.
From where I stood now, I could check it over and over and still find no problem.
Was that only natural?
The securities firm’s executives and employees weren’t idiots. If there had been a problem I could spot just from the documents, they would have noticed it long ago.
＊ ＊ ＊
I decided to think through a solution slowly for now and headed to the cafeteria to eat lunch.
Maybe because I thought of this as a regression, the cafeteria felt strangely familiar. The food wasn’t great, but I’d eaten here plenty of times.
Just as I was carrying my tray and preparing to sit down, someone waved at me.
“Miru! Over here!”
Turning my head, I saw a table with two men and one woman seated together.
All three were my cohort from when I joined the company.
The man waving at me was Hwang Yeong-min. He was a bond broker in Corporate Sales, and two years older than I was.
The man beside him, wearing glasses and keeping his hair short, was Bae Geun-seok, who worked in Trading. He was the same age as me.
And the woman across from them was Sung Yoon-ah.
She was my cohort, two years younger than me, but a gifted graduate of New York University. As you’d expect from someone who’d studied abroad, her English was fluent, and if you taught her one thing, she’d understand ten.
Her academic record was excellent, her work ability was outstanding, and she was beautiful as well.
She stood just over 160 centimeters tall with a slender figure, a small oval face, a smooth, bright forehead, neatly shaped brows that looked almost drawn in, large eyes, a straight nose, and lips that were full and red.
Her long hair was tied back so it wouldn’t get in the way, and her makeup was modest and neat. There was still a fresh, early-career innocence about her.
Hwang Yeong-min spoke in his usual chattery tone.
“It’s been a while since the four of us from the same cohort had lunch together.”
Bae Geun-seok nodded.
“It really has. Even though we work in the same building, it’s not easy to see each other.”
Of the twenty-one people hired through DA Securities’ first-round recruitment that year, some had quit because the work wasn’t a good fit, and others had been sent to branches, leaving only seven of us at headquarters, myself included.
Sung Yoon-ah looked at me and asked, “Is something bad going on?”
“No. Not really.”
“Then why is your face so stiff?”
“Well....”
Thinking about what had already happened once, and what might happen again, I couldn’t bring myself to smile.
Bae Geun-seok had died in the fire, Hwang Yeong-min had survived but been badly injured, and Sung Yoon-ah had quit the company before then, which was how she’d escaped with her life.
Seeing her made me remember something.
Come to think of it....
The moment I opened my mouth, Hwang Yeong-min beat me to it.
“Isn’t that Executive Director Yang Jeong-uk?”
I turned toward the entrance and saw a man in his mid-forties walking into the cafeteria.
He seemed to keep himself in good shape; his shoulders were broad, and he had a solid build. His expression carried the kind of confidence that said he’d never once had to ask anyone else for a favor in his life.
He had originally been an executive at DA Life, but last year he’d been promoted to executive director at DA Securities. Since DA Securities was only a mid-sized firm, there was no vice president; right below the president was the executive director.
In practical terms, he was the organization’s number two.
The reason he’d reached executive director by the age of forty-three was not because he had some genius talent for management, but because he was the eldest son of Yang Hyeon-seong, chairman of the DA Financial Group.
A number of people followed behind him as though escorting him, and one of those faces looked familiar. When I looked more closely, I realized it was our department manager.
So that’s why he’d been nowhere to be seen all morning. Busy climbing the ladder, were you?
When I thought of it all as for the sake of our department’s development, my chest swelled with pride.
The people nearby stopped eating and quickly got up from their seats to bow.
“Welcome, Executive Director.”
“W-What brings you here?”
Yang Jeong-uk smiled and said, “I’m here to eat too, so don’t get up. Just relax and enjoy your meal.”
As if anyone could relax with the executive director in the cafeteria. Whether he knew that or not, he took a tray and got in line for food.
Bae Geun-seok watched him and said in a low voice, “Don’t you think he’s amazing? DA Securities has grown so much since Executive Director Yang came in.”
That much was true.
That was because the DA Financial Group had been funneling business his way. Since Chairman Yang Hyeon-seong had only one son, Yang Jeong-uk was effectively being groomed as the next chairman.
Hwang Yeong-min nodded.
“And it was Executive Director Yang who brought in the Primus Fund this time, too.”
“I heard Future Investment Securities, Yuseong Securities, and KD Securities were all eyeing it too. How did he manage to win exclusive distribution?”
Sung Yoon-ah said, “Apparently he’s personally close to Park Tae-il, the CEO of Primus Asset Management.”
“Really?”
“Either way, it means he handled institutional sales well through his network.”
Listening to them, I muttered without thinking, “Looking back now, that was the problem.”
“Huh? What do you mean?”
At her question, I shook my head.
“Nothing.”
To question the Primus Fund was, in essence, to question Yang Jeong-uk’s managerial ability.
That was why nobody even considered investigating it, and that only made the problem worse.
Bae Geun-seok said with a startled expression, “Oh—he’s coming this way.”
Just as he said, Executive Director Yang was walking over to our table alone. It seemed he wanted to create the image of having lunch with the new hires.
“May I sit here?”
Hwang Yeong-min answered, flustered, “O-Of course.”
Yang Jeong-uk sat down and exchanged greetings with us.
“Is the cafeteria food to your liking?”
“Yes, of course.”
“It’s very good.”
Just dealing with an executive director was intimidating enough. But this was the future chairman of the entire group.
This was probably what it felt like for a junior officer to eat with a corps commander.
Yang Jeong-uk turned to Sung Yoon-ah and asked, “Are you having any trouble with work?”
“No, Executive Director.”
With a smiling expression, Yang Jeong-uk made light conversation with the employees around him as they ate. His casual manner gradually loosened the stiff expressions of the staff who had been tense at first.
On the surface, he looked like a considerate executive who took care of his employees. That was probably why he was so popular among them.
As I was thinking that, Yang Jeong-uk spoke to me.
“The food doesn’t seem to suit you very well.”
“Pardon?”
“You haven’t really touched your meal.”
“Ah, yes.”
Honestly, the moment I saw his face, my appetite vanished completely.
He didn’t know me well, but I knew him all too well.
I looked at Executive Director Yang and said, “It’s been a while, Executive Director.”
Seeing him brought back memories of the old days all on their own.