Free Web NovelThere had already been rumors last time that other forces had been involved in the breakup of Joongwoo Group.
It was inevitable, considering the subsidiaries of Joongwoo Group, which had been torn apart and sold to other conglomerates and foreign capital, continued to grow without issue.
“Why the hell was Chairman Park arrested by the prosecution? Call the Prosecutor General in right now.”
“Yes, Mr. President.”
From early morning, major daily newspapers were plastered with reports of Joongwoo Group’s various corrupt practices. President Kim Hakgwon, hearing not just that the prosecution had summoned the chairman of a conglomerate but had actually arrested him under an emergency warrant, was busy trying to grasp the situation.
Shortly after, Prosecutor General Yoon Changho entered the Blue House at the president’s summons.
“Come in, Prosecutor General Yoon.”
“You called for me, Mr. President.”
“Please, sit.”
As Yoon sat, Kim Hakgwon let out a long sigh.
“What the hell happened with Joongwoo Group?”
At the direct question, Yoon replied immediately with the answer he had prepared on his way there.
“The accounting fraud is extremely serious, Mr. President. If we leave it alone, it’s a time bomb that could blow up Korea’s economy in one hit.”
“No, Yoon. If something like this happens, the president should be informed first.”
“My apologies. We were preparing to act, but the press leaked the story before we could do anything.”
Kim Hakgwon sighed again at that response.
Yoon pressed on.
“Chairman Park Daeho could flee abroad at any time, so we had no choice but to arrest him immediately. The court issued the warrant as soon as they saw the evidence we prepared.”
Kim Hakgwon frowned deeply and stayed silent for a moment.
Finally, he asked in a heavy voice, “You intend to hold him in custody?”
“Yes, sir. If we release him without detention, there’s a /N_o_v_e_l_i_g_h_t/ high risk of evidence tampering and scapegoating.”
“There’s a lot Chairman Park needs to do, starting with the gold collection campaign. Isn’t there any way around this?”
Yoon looked at Kim Hakgwon with a concerned expression.
“If you give the order, Mr. President, I’ll follow it. But it will be a heavy political burden for you.”
“It’s still the honeymoon period. The press won’t release negative articles about me for now. So....... keep him out of detention for the moment. I’m not saying to drop the charges—just investigate slowly.”
“Yes, Mr. President.”
At that moment, the Chief Secretary rushed in, pale-faced.
“Mr. President! You need to see this on the news!”
“What? What’s going on?”
Kim Hakgwon was about to scold him for barging in, but he closed his mouth when he saw the secretary’s ashen face.
The secretary silently turned on the TV.
― “We are preparing for a hostile takeover of Joongwoo Group’s key subsidiaries. As major shareholders, we can no longer tolerate Chairman Park Daeho’s illegal activities, so we made this decision.”
― “What are your plans going forward?”
― “We’ll begin open purchases of shares in core subsidiaries, starting with Joongwoo Corporation. We intend to move together with the many investment firms already holding Joongwoo’s stock.”
On-screen, a woman with exotic features was surrounded by a crowd of reporters.
The caption at the bottom of the screen read, “Eva Zhu.”
“What the hell is this?”
Kim Hakgwon’s jaw dropped as he watched the press conference.
Yoon focused intently on the announcers’ voices.
The Chief Secretary, voice trembling, answered, “The press conference is just the beginning. Investment banks in the U.S. have already contacted the Ministry of Finance, demanding that the government clarify its stance on Joongwoo Group.”
“What?”
“If the government doesn’t proceed according to the agreed terms.......”
The secretary didn’t finish, but Kim Hakgwon didn’t need to hear the rest.
“Get the Minister of Finance in here immediately.”
“Yes, Mr. President.”
The secretary rushed out, and Kim Hakgwon looked back at Yoon.
“For now, let’s reconsider Chairman Park’s situation. Handle it as you see fit.”
Yoon nodded calmly.
“Then I’ll take my leave, Mr. President.”
“Keep me updated on the investigation.”
“Understood.”
As Yoon stood to leave, Kim Hakgwon’s voice stopped him.
“By the way, how bad is the accounting fraud?”
Yoon turned back, his stiff face opening into speech.
“From what’s been confirmed so far, it’s over 10 trillion won. And that’s just the tip of the iceberg.”
“Hu.......”
Kim Hakgwon was momentarily speechless at the staggering amount.
“There’s also evidence that slush funds have been moved overseas. Embezzlement and breach of trust are just the basics.”
“.......Alright. You may go.”
“Yes, Mr. President.”
After Yoon left, Kim Hakgwon buried his face in his hands.
“What the hell was Chairman Park thinking?”
As he shook his head in frustration, Minister of Finance Lee Seonggyu entered the room.
“Mr. President, you called for me.” freёweɓnovel.com
“Sit, Minister Lee.”
Lee Seonggyu, who had served as a bureaucrat since the Fifth Republic, still couldn’t break his habit of calling the president “Mr. President,” despite Kim Hakgwon’s request to avoid it.
“What’s the mood?”
“The Ministry of Finance plans to oppose injecting public funds into Joongwoo Group, both as a warning to the chaebols and because saving Joongwoo could collapse Korea’s economy.”
“Hu.......”
“And the IMF won’t stay quiet. Not all the promised dollars have entered the country yet.”
“This is the third-largest conglomerate in Korea. Who knows what side effects might follow if it collapses.”
Kim Hakgwon’s tone was heavy, and Lee Seonggyu’s expression darkened.
“What does the prosecution say?”
“They insist on detaining him for investigation.”
“Even with the second round of IMF support stabilizing the immediate crisis, there’s no new foreign investment yet. If you, Mr. President, step in to save Joongwoo Group, no investors may want to put money into Korea.”
Kim Hakgwon felt stifled.
“What about that woman, Eva, who held the press conference today?”
“She’s a Hong Kong-based investor who entered Korea before the IMF deal under the name Future Investment. We believe she has backing from Hong Kong and British capital. Currently, she’s investing mainly in real estate....... but we think she’ll move into corporate takeovers eventually.”
“Her capital power?”
“She’s among the top of the foreign investors in Korea.”
Muttering the name Future Investment under his breath, Kim Hakgwon let out a low groan.
“She says she’s launching a hostile M&A. How do you think this will play out?”
“It will be difficult. Even if they buy up all the shares on the market, Joongwoo’s subsidiaries are so cross-owned that it’ll be hard to win. But with time, that’s not guaranteed.”
The cross-shareholding structure of Korean conglomerates was tough to crack.
But to foreign investors, those structures were full of exploitable holes.
“Over 10 trillion won in accounting fraud in Joongwoo Group. Is that even possible?”
Lee Seonggyu’s face paled slightly.
“Accounting fraud in big companies isn’t new. We saw it with Hyunbo Group. But 10 trillion....... I’ve never seen anything like that.”
“What about breaking Joongwoo up and selling it to other conglomerates?”
“It’s too big. The debt and bad loans are too heavy for any conglomerate to willingly step in. Some might take the good subsidiaries, but no one will touch the bad ones.”
When Lee shook his head, Kim Hakgwon rubbed his forehead and muttered, “So you’re saying there’s no way?”
“You know, Mr. President, who could be our white knight....... someone friendly to Korea but still foreign capital, someone the U.S. government likes.”
“You mean Chairman Han?”
“Yes. We can ask him for help for now, and once Korea’s economy stabilizes, we can push for resale to domestic conglomerates. Other private equity funds would strip the company for parts immediately. Their goal is capital, not companies.”
Kim Hakgwon and Lee Seonggyu continued their discussion for a long while.
Later, as Lee left the Blue House, he made a call from his official car.
“Yes, sir. The government won’t step in to save Joongwoo Group. You can proceed as planned.”
— Thank you. We’ll arrange a meeting soon.
“Not at all, sir. I’ll see you next time.”
Lee hung up, a satisfied smile on his face.
As a key member of the MOFIA, the economic leader responsible for Korea’s economy was also playing his own game. ƒrēewebnovel.com
The car carrying Lee slowly entered a tunnel.
Joongwoo Group’s future, too, was headed into a tunnel with no clear end.
* * *
Eventually, a detention warrant was issued for Chairman Park Daeho, and he was sent to prison that evening.
For days, the front pages of major newspapers were dominated by stories of Joongwoo Group.
“Still no contact from the Blue House?”
“Yeah, nothing yet.”
“They’ll contact us soon. Eva’s doing her job well.”
Eva continued giving interviews to the media, making her stance clear.
As Joongwoo Group shook and Eva announced her open purchase intentions, a long-awaited breeze of optimism returned to the stagnant stock market.
Domestic conglomerates were sniffing around Joongwoo’s subsidiaries, and large foreign private equity funds were signaling interest in the acquisition war, forcing the government into deeper deliberation.
“The accounting fraud revealed so far is just the tip of the iceberg. Once the Financial Supervisory Service conducts a full investigation, many of those entering the acquisition war will back out. Except for a few high-quality subsidiaries.”
Joongwoo Group’s accounting fraud was practically a textbook case, using countless ingenious and unimaginable methods.
Dozens of accounting experts and certified accountants must have collaborated to pull it off.
It would take the Financial Supervisory Service a long time to uncover everything.
While all eyes were on Joongwoo Group’s insolvency, other domestic companies were still going bankrupt.
The government needed to make a quick decision on Joongwoo Group.
“When the Blue House contacts us, do I meet them alone? What about you, Muhyuk?”
“This time, you go alone.”
I patted Han Kyungyeong’s shoulder.
No matter how favorable Kim Hakgwon was toward me, he wouldn’t like me getting directly involved.
“Get as much of the debt written off as you can. In return, say you’ll take over everything as long as it’s not beyond recovery.”
“Okay.”
Taking over Joongwoo Group whole couldn’t be done in a short time.
But with Eva and Han Kyungyeong, two top experts, the government would have no choice but to side with Han, even without my direct involvement.
The public part of the operation was theirs to handle.
Now it was time for me to handle the shadowy side.
“Just wait. Things are about to get more interesting.”
After the interest rate cap law was abolished, many Japanese lending firms began entering Korea.
Even small loan companies unrelated to Cheongpunghoe were coming, drawn by the new, lucrative market.
Japan’s legal maximum interest rate was 29.5%, and the government’s oversight was strict. But with Korea now having no interest rate cap at all, there was no reason for those Japanese lenders not to come.
Especially A&S Financial, backed by Yamaguchi-gumi’s funds and tied to Cheongpunghoe, began aggressively promoting itself with a Korean CEO as its front.
Though officially a Korean corporation, A&S Financial was essentially Japanese, with J&K Capital of Japan holding 99.97% of its shares.
With domestic financial institutions tightening credit, ordinary people were forced to turn to private loans. The absurdly high interest rates only worsened their suffering.
“We’re entering an interest rate war with A&S Financial. Offer loans at 1% lower than theirs, no matter what. Especially push refinancing aggressively for people who borrowed from Rush & Money.”
I explained our next steps slowly to Hyunseong and President Kim Hosik.
The money war.
A chicken game that would continue until someone fell.
“It’d be nice if we could play it clean, but if that were possible, Japan wouldn’t have entered the market. I’m using every resource I have this time. Win no matter what.”
If we won this war, we could choke the life out of Cheongpunghoe.
< The Beginning of the Money War. > End
