Primus Fund 2
According to Heinrich’s law, warning signs always appear before a major disaster.
It had been the same before the Primus debacle broke.
Roughly six months earlier, one problem and rumor after another had begun to surface.
I’d immediately filed a report saying we needed to stop selling the Primus Fund and start reviewing its asset holdings.
DA Securities was a midsized firm, so promotions came quickly, and by then I already held the title of assistant manager.
My stock recommendations and analyses had proved accurate enough that the number of clients who trusted me kept growing.
But even after several reports, nothing was done, so I confronted the branch manager.
“What exactly do you think the problem is?”
“Redemptions on three funds have been delayed for two months now.”
“They said asset sales are taking time.”
“What about the suspicion of illegal convertible bond trading? After testimony emerged that Primus had been skimming rebates through improper CB trades, three members of the board suddenly resigned and fled overseas. Doesn’t that strike you as strange?”
“It’s all rumors. Things like that happen all the time in this business.”
“It’s hard to dismiss as a simple rumor when there are this many suspicious points.”
“You’ve barely been an assistant manager for a moment and already you think you know everything? You realize you’d be the one responsible if we alienate Primus, right?”
“I don’t know how large the shortfall is, but if we handle this wrong, we could end up taking the blame too. I’m going to write an investment caution report and inform the clients as well.”
“What? Hey! Han Miru!”
The next day, Executive Director Yang Jeong-uk called for me.
Even though I ran into him occasionally at the company, this was the first time I’d met him alone.
He looked at me and asked, “I heard from Branch Manager Yoon Yeong-cheol that there are several concerns regarding the Primus Fund?”
“Yes. Exactly what I wrote in the report. And not just the things coming up now either. Even though assets under management more than tripled in just two years, nothing had changed then or now. It’s also odd that they’ve been earning steady returns regardless of market volatility.”
Executive Director Yang listened seriously.
“Then what do you suggest we do?”
“Primus should disclose the fund materials and explain the concerns, if only to calm investors’ anxiety. We also need to verify whether the assets they submitted before actually match what they’re holding now.”
He nodded at my words.
“The truth is, the company is already investigating that issue.”
I was stunned by that.
“Pardon? Really?”
“If information leaks ahead of an investigation, it could become a serious problem. It can cause noise during the process, and the other side might prepare a response to match it. You understand what I mean, don’t you?”
“Ah, yes. I understand.”
Thinking about it, that made sense.
If even a mere employee like me had sensed something was wrong, then the higher-ups must have already realized it long ago.
I had nearly gone and made a mess of an active investigation for nothing.
Executive Director Yang patted my shoulder kindly and said, “For now, there’s a good chance there’s no problem at all, so don’t worry too much, Han Miru.”
“Understood, sir.”
I believed him and waited for the investigation to finish.
But three months passed with no word, and then Executive Director Yang was suddenly promoted to vice chairman of DA Bank.
Two months after that, the Primus scandal erupted and went down in history as South Korea’s worst private-equity fraud case.
It was later revealed that Executive Director Yang had known for a long time that the Primus Fund was investing elsewhere.
The reason he had stayed silent all that time was the massive sales commissions.
Yang trusted CEO Park Tae-il’s abilities and thought that even if there were some losses, they’d be recovered quickly.
But by the time he realized the fund was rotten, the situation had already grown beyond the company’s ability to contain it.
So instead of announcing it immediately, they kept selling and bought time to dodge responsibility.
In the meantime, they contacted politicians and influential figures to let them pull their money out, and Yang Jeong-uk and several other executives scrubbed their connection to the Primus Fund before moving over to DA Bank.
So who paid for it in the end?
The employees who remained behind. The company handed down harsh disciplinary action to those involved, as if it needed to prove to the outside world that it was doing something.
Salary cuts, removal from position, suspension, dismissal, and more.
I was among them, despite having written dozens of recommendation reports over the years.
The report in which I had pointed out the problem had never once been formally submitted, and Executive Director Yang was recorded as having received no such report at all.
Neither I nor the other employees had done anything more than follow orders, but that didn’t mean we were innocent. The people who should have borne responsibility, the people who were actually in position to carry it, had all slipped away.
No compensation was paid to the fund investors, and that was how the tragedy came about.
Countless employees died or were injured. Beyond fire compensation, they received almost nothing. The survivors lost their jobs when the company collapsed and were cast out.
Executive Director Yang never apologized to the victims, and he never apologized to the employees.
The workers who had lost their jobs and the bereaved families who had lost loved ones staged protests in front of DA Bank headquarters. I went there in place of Senior Dongho, who was receiving treatment in the hospital.
Even after repeated pleas from both employees and bereaved families, he never met with us even once.
I finally lost my temper and rushed at him as he came out toward the underground parking lot, only to be grabbed at once by his security.
As they pinned me to the ground, I shouted at him, “This is your fault! What about the people who lost everything and the people who died? Aren’t you the one who should be responsible?”
He was walking to his car as if nothing had happened, but when he saw my face, he stopped.
“Why is that my responsibility?”
“What?”
“It’s the responsibility of the person who wrote the faulty report, and the people who invested without properly checking. You should have looked into it more carefully before writing, Han Miru.”
“……”
He pulled several checks from his wallet and placed them in front of me, then said kindly, “You look like you haven’t even washed in days. Go home now, take a shower, and get some rest. Buy yourself something good to eat, too. Nothing’s going to change if you keep standing here like this.”
I could see his face just before the car door shut. Beneath that indifferent expression was a sneer.
That was the last time I saw him in person.
* * *
“It’s been a long time? Have we met before?”
At Executive Director Yang Jeong-uk’s voice, I snapped back to reality.
For me it was as vivid as yesterday, but for him it was something that hadn’t even happened yet.
I answered carelessly. “I greeted you when you passed through the lobby a few days ago.”
Yang Jeong-uk chuckled as if amused. “I see. If I don’t want to go so long without seeing you again, I suppose I’ll have to stop by the cafeteria more often from now on.”
As he ate, he asked the employees around him, “Is there anything wrong with the company? Anything that needs fixing?”
At his question, the employees nearby answered in unison.
“Not at all.”
“It’s excellent.”
“Our company is the best.”
“Haha! If it’s hard to tell me directly, then post it anonymously on the internal board. If the company is a home, then the employees are practically family. The company only does well when its employees are happy.”
You spineless bastard. You ran off and abandoned everyone, even if it meant your families died.
What a two-faced bastard.
I kept my expression under control so my thoughts wouldn’t show, then slowly raised my hand.
Our branch manager, who was looking this way from the other table, shook his head as if to say, “Don’t say anything unnecessary,” but I pretended not to notice and spoke anyway.
“May I ask you one question, Executive Director?”
Yang Jeong-uk looked interested. “Of course. What is it?”
“If the company’s interests and the client’s interests ever conflict, what do you think is the right thing to do?”
“Hmm, that’s a good question.”
Yang Jeong-uk said it loudly enough for everyone to hear.
“The answer is simple. We must place the client’s interests first. A securities firm exists for its clients. We have a duty to protect their assets and manage them according to the principle of good faith. Even if the company suffers a disadvantage in the short term, in the long run that will come back as profit.”
At that, the employees were visibly impressed.
“That’s such a wonderful thing to say.”
“I’ll keep that in mind.”
On the surface, it was an excellent answer. Shame he never lived by it.
I nodded. “Thank you, Executive Director.”
* * *
Before going back to my desk, I stepped outside with Senior Dongho to buy coffee.
Dongho stirred his whipped cream and said, “Do you know why the branch manager specifically ordered you to write that report himself?”
“Because it was Executive Director Yang who brought the Primus Fund into DA Securities. The fund’s sales would count toward his performance, so the branch manager was probably handling it personally. If you wrote a good recommendation report and submitted it, the executive director would be thrilled.”
At my words, Dongho’s eyes went wide.
“What? How do you know that so well? Who told you?”
From my first life, Senior.
Dongho had been researching hard, saying that workplace life was all about which line you were on. But the company collapsed before he’d even had a chance to get on the right one.
“I just picked it up from here and there.”
Dongho cleared his throat awkwardly and said, “Anyway, Chairman Yang is going to retire within a few years, right? Then Yang Jeong-uk will take over.”
“Probably.”
Chairman Yang Hyeon-seong of the DA Financial Group had one son and one daughter.
Korean chaebols had their own beautiful(?) tradition of family succession. The chairman’s son becoming the next chairman was considered completely natural.
“There’s talk that Executive Director Yang came over to the securities firm as part of his succession training. As you know, DA Financial Group is strong in banking, credit cards, and insurance, but securities is its weak point. So the group supports it on a corporate level and funnels performance there.”
Even if bloodline inheritance was the rule, there was no way shareholders would be happy if someone without the ability sat in the chairman’s seat.
That meant the heir had to prove he had management talent through results.
“Either way, this is a good opportunity for you. If you write the report well, the branch manager will like you, won’t he? Office life isn’t just about working hard; it’s also about making yourself look good to the people above you. In other words, you need to get on the right line. Think you can write it well?”
“Writing it won’t be a problem.”
Even in my first life, when I knew nothing, I’d written it quite well and submitted it.
The branch manager had been very pleased, and after that he kept assigning me the fund recommendation reports.
So I wrote those reports every quarter, never knowing what result they would eventually bring.
“What do you think of the Primus Fund? It made six percent last year, didn’t it? Maybe I should sign up for it too.”
“What about stocks?”
“I’m not going to bother with them anymore. Thinking about it, stability seems like the best thing.”
“……”
In the end, Senior Dongho really did buy the Primus Fund. As an analyst, how he could keep stepping on land mines like that was a mystery.
“Why are you looking at me like that?”
I sighed and said, “I think it would be better if you just didn’t invest at all, Senior.”
Dongho looked baffled. “Huh? Why?”