The Power of a Chaebol
“Ah. So you’re the man holding six percent of the voting rights. I’m Park Jin-tae, in charge of the strategy office.”
“!”
Director Im had not realized that James was someone wielding a staggering six percent of the votes.
“Director Im.”
“Y-yes.”
“Let’s leave the microphones where they are for now...”
Then he turned back to James and asked for his understanding.
“We’ll leave the installed microphones and speakers as they are. But I’d appreciate it if you stepped in only when you don’t like the way the meeting is being run. TY Telecom will do its best to keep things fair.”
“I don’t think TY Telecom has ever shown much fairness before.”
“...Please trust us today. And could you spare me a moment?”
“The shareholders’ meeting is about to begin.”
“It’ll only take a moment.”
“If it’s only a moment, then I suppose that’s fine.”
That, too, had already been discussed with Director Park in advance. They had predicted that if Colt and James acted separately, the TY family would make a move for sure.
◇◇◇◆◇◇◇
Park Jin-tae led James into a private room behind the auditorium and stood before the chairman.
“Chairman. This is James Kane, who has secured six percent of the voting rights. He is also one of today’s candidates for inside director.”
Chairman Choi Tae-yeong greeted James with a courtesy that was unusually respectful for him.
“A pleasure to meet you. I’m Choi Tae-yeong, chairman of the TY Group.”
“Ah. So you’re Chairman Choi. Likewise. I’m James Kane.”
“We don’t have much time, so I’ll ask directly. May I ask why you came to our shareholders’ meeting today?”
“I’ll keep it brief as well. I invested in the company because I believed in TY Telecom, but the company’s recent behavior has been so outrageous that it’s become impossible to trust. I felt new leadership was necessary, so I joined forces with a few acquaintances I know.”
Chairman Choi narrowed his eyes and studied James, wondering whether he might somehow be connected to the foreign force that had appeared this time.
“So we’ve put forward Choi Jeong-san for removal from management and nominated Choi Jeong-pil, who has grown TY Chemical into what it is today. Would you be willing to throw your support behind us?”
“Well. I’ll need to look a little deeper before deciding. Still, it’s fortunate that you’ve chosen to oust Choi Jeong-san, who drove TY Telecom straight into the ground. I thought I’d have a chance to meet him today, but he’s not here?”
“...He has reasons to be ashamed. He’s staying at home and reflecting on himself.”
“Then shouldn’t the voting rights attached to his seven percent stake also be excluded?”
“...Hmph.”
To Chairman Choi, it was nonsense. Because Choi Tae-jin could not be reached, the additional voting rights tied to the 1.5 percent stake had not been added, leaving the chairman with only 21.5 percent of the votes.
If Choi Jeong-san’s seven percent stake and the National Pension Service’s seven percent were added, the total would reach 35.5 percent. Only then would it be possible to surpass Colt’s 31 percent.
“If Mr. James helps us, we might be able to set Choi Jeong-san’s voting rights aside.”
“I understand that the advance electronic voting and proxy forms for today’s meeting have already been closed.”
“......”
Interest in this shareholders’ meeting had been intense, and so had the early electronic voting. But most of those votes were going not to the candidate put forward by TY Telecom, but to Colt Evans, the man backed by an outside force.
“Besides, Choi Jeong-pil is someone who grew up under the same TY Group umbrella. Now that Choi Jeong-san’s moral bankruptcy has been exposed to the entire world, I can’t understand what meaning there is in putting forward another man from the same family as CEO.”
“Then this conversation should end here.”
The chairman turned away without hesitation, and Director Park stepped in.
“Thank you for your time.”
It was his way of saying James should leave now, but James still had something to say.
“...If I add your family’s 28.5 percent to the National Pension Service’s seven percent, that makes 35.5 percent. But if I throw my support behind Colt Evans today, this side has 37 percent. Are you certain?”
With the shares that had been disclosed so far, there was no way they could beat the coalition of Colt and James, yet Chairman Choi was displaying an inexplicable confidence.
“You won’t know until you open the lid.”
“Then I wish you luck.”
Only then did James turn and leave the private room. Director Park followed under the pretense of escorting him out.
“Do you have another chunk of shares secured?”
“TY Chemical tried to buy up shares through securities firms, but it didn’t go very well, and a public tender offer for shares wasn’t all that effective either. There was nothing beyond what I’d already confirmed.”
“But Chairman Choi looks confident.”
“And yet...”
The cards James had shown so far were not all of them. From the start, he had already secured more than they had.
“Good work. We’ll see each other after this is over.”
“Yes.”
The quiet exchange ended, and the two men returned to being strangers.
“The TY Telecom shareholders’ meeting will now begin. Shareholders and honored guests, please take your seats.”
At the moderator’s announcement, the meeting was underway.
As was usual for a shareholders’ meeting, the first agenda item was approval of the financial statements, showing how much revenue TY Telecom had generated over the past year and how much its assets had grown. The consolidated financial statements, which subtracted and added revenue generated by numerous affiliates, and the separate financial statements, which reflected only TY Telecom’s own operations, were presented as the first item of business, and they passed without difficulty.
“I announce that Agenda Item No. 1, the consolidated financial statements and the separate financial statements, has been approved as originally proposed, with a majority of the voting rights in favor.”
Chairman Choi Tae-yeong lifted the gavel, hoping that things would continue this way.
“I approve Agenda Item No. 1.”
Bang, bang, bang.
“Agenda Item No. 2 concerns the dismissal of CEO Choi Jeong-san, who caused public scandal last year...”
James didn’t want to drag out an item that was going to pass anyway, so he took the microphone that had been set up.
“Let’s go straight to the vote. I don’t think there’s a single shareholder here who doesn’t know what this is about.”
“...Yes. We’ll proceed directly to the vote. If anyone has any objections to this item, please speak now.”
“......”
Since no one wanted to see Choi Jeong-san return as CEO, the auditorium remained silent.
“I announce that Agenda Item No. 2 has passed as originally proposed, with unanimous approval from the shareholders present.”
Chairman Choi’s expression hardened as he lifted the gavel. This was his own son, the man he had put forward, being cast out by his own hand.
“I approve Agenda Item No. 2.”
Bang, bang, bang.
Every time the chairman struck the gavel, the reporters scrambled to capture it on camera.
Click-click-click.
“Agenda Item No. 3-1 is for the appointment of a new inside director to fill the vacant seat. The candidate is Choi Jeong-pil, who has managed TY Chemical for many years and demonstrated stable performance and managerial ability. This candidate...”
James took the microphone again.
“I’d like to point out that this candidate is the younger brother of Choi Jeong-san, the man who caused so much trouble at TY Telecom last year, and that he is therefore a candidate who does not align with the wishes of shareholders who want the TY Group’s controlling family excluded from management.”
At James’s words, even the reporters raised their hands and started firing off questions.
“Chairman Choi Tae-yeong, are you not planning to appoint a professional manager?”
“TY Telecom needs a new leader!”
It was proof that public sentiment toward the TY family was far from favorable.
James poured fuel on the fire.
“There is also the person previously identified as the child of a chaebol family involved with drugs. Choi Tae-jin, the son of Choi Jeong-san and the grandson of Chairman Choi Tae-yeong. We’ve also confirmed his current situation today.”
James had decided to drop the news about Choi Tae-jin, which had come up during his conversation with Chairman Kim Seong-oh.
The reporters’ murmur was proof that this was information no one had known until now.
“Director Park. What the hell is he talking about now?”
“I’m not sure, either...”
After the murmuring from the reporters died down, James spoke again.
“Choi Tae-jin, who distributed drugs inside Korea and spread them among the children of chaebol families, was arrested by the U.S. DEA and is currently under investigation. Even after going to the United States, he still couldn’t quit drugs.”
The reporters began raising their hands in a flurry, throwing out questions.
“Is that true? Where can we verify this?”
“You can confirm it by requesting a factual inquiry from the U.S. government.”
Chairman Choi jerked around to look at Director Park in disbelief.
“What is he talking about? Wasn’t that brat Tae-jin supposed to be under the strategy office?”
“...Madam took some of the strategy office staff away separately, so we weren’t able to verify it either. We haven’t been able to contact him for a very long time.”
“What?”
A massive outcry began to rise from the auditorium packed with minority shareholders.
“That filthy controlling family needs to step down from management!!”
“Step down!”
“Step down!”
As even the minority shareholders joined in shouting, the meeting hall was growing beyond control.
“Everyone, please keep quiet. If you continue causing a disturbance, you will be removed!”
After a while, the noisy meeting hall fell silent again, though it was the kind of silence that could shatter at any moment.
“We’ll proceed to the vote immediately. Shareholders who approve the appointment of Choi Jeong-pil as a new inside director...”
James paid close attention to who was voting in favor of Choi Jeong-pil’s appointment as inside director.
Chairman Choi Tae-yeong is a given...
“With proxies from two people besides himself, that makes 28.5 percent in favor.”
The next to speak was the person attending the meeting in place of the chair of the National Pension Service.
“The 7.2 percent held by the National Pension Service will vote in favor.”
He cast his vote with a slightly reluctant expression. It was awkward enough that the chairman’s grandson was under investigation in the United States, but he was only a proxy voting on the chair’s behalf.
In the end, Chairman Choi had even won over the National Pension Service. But even that was still within the voting rights James had expected.
In favor: 35.7 percent.
Then a woman sitting beside Choi Jeong-pil stepped forward. She was his wife.
“I’ve secured four percent through proxies from seven shareholders. In favor.”
“!”
With the unexpected addition of four percent, the total in favor of Choi Jeong-pil’s appointment as inside director had risen to 39.7 percent.
“The votes in favor total 39.7 percent. It seems opposition will be meaningless, but...”
“We still need to confirm the opposition!”
James shouted into the microphone, forcing the moderator to confirm the opposing votes.
“...I’ll check.”
When James gave Colt a look, Colt stood up, stated his voting rights, and voiced his opposition.
“Mr. Colt Evans, who holds 31.1 percent of the voting rights, opposed the motion.”
James also spoke into the microphone without delay.
“I’m James Kane, holding six percent of the voting rights. I also oppose the appointment of Choi Jeong-pil as inside director.”
“Opposition totals 37.1 percent...”
Just as the moderator was trying to wrap things up in a hurry, the minority shareholders began speaking up.
“We’re opposed too! Choi Jeong-pil is unqualified!”
“We oppose it!”
The minority shareholders each voiced their objections, but their voting rights were not enough. They were not sufficient to overcome the 2.6 percent gap between 39.7 and 37.1.
“There was a delay while we calculated the minority shareholders’ stakes, but after including electronic voting, we’ve confirmed that those stakes account for 0.9 percent. The total opposition comes to 38 percent...”
Chairman Choi wore a smile of triumph.
I saw this coming, so I asked my in-laws to prepare in advance.
Choi Jeong-pil’s wife came from a family that operated a company of its own, and in particular, they had strong ties with securities firms. Thanks to that, they had been able to acquire a considerable amount of shares through those firms.
That was close, though. A margin of only 1.7 percent...
Just when Chairman Choi was certain of victory, the lawyer who had come with James stepped forward.
“We request confirmation of additional voting rights!”