» The Youngest Son of Sunyang
The Youngest Son of a Chaebol Family - Chapter 287
[287] A Labyrinth of Schemes, Sunyang Family 3
These days, he practically commuted to the HW Group chairman's office. It was to daily check the funds pouring into Dubai, funds that would soon become a bomb dropping directly onto Vice Chairman Jin Donggi's head.
"Dojun. Is this truly alright? Isn't the U.S.-triggered financial crisis weaker than we anticipated?"
Chairman Lee Hakjae tossed the morning newspaper aside.
"If the shockwaves of the U.S. financial crisis are weak, we'll only be putting wings on Jin Donggi's shoulders. If his liquidity issues disappear, he'll make a fortune next year. He'll hold onto his current position even more firmly."
As I unfolded the newspaper he had tossed, my eyes nearly popped out of my head.
How could they be so utterly clueless about the state of the world?
Is this really the extent of foresight from those who claim to lead Korean finance?
"Korea Development Bank Sounding Out Acquisition of U.S. Financial Giant Lehman Brothers.
Concrete Acquisition Terms Already Proposed.
Equity acquisition proposed in three stages: $23, $18, and $6.4 per share."
"Crazy fools. What do they plan to do by acquiring a company on life support, barely clinging to life...."
"Are you certain?"
"Absolutely. Lehman Brothers won't even receive bailout benefits from the U.S. government. I'm telling you, they're truly beyond saving. They're on the verge of bankruptcy."
After Lehman Brothers' bankruptcy, Nomura Securities, aiming to become a global investment bank, would acquire only Lehman Brothers' Asian and European divisions.
The acquisition price for the European division would be a mere $2, on the condition of retaining all employees, while the Asian division would cost $225 million.
Nomura Securities, with 11 trillion won in capital, considered it an opportunity to rise as a global investment bank, and thus could invest such an amount without hesitation.
To propose an equity acquisition at $23 per share for a company that could be acquired for a mere $2, either indicates utter foolishness or the concealment of some dirty deal.
Since the Korea Development Bank isn't *that* foolish, it's obvious what kind of transaction is taking place right now.
The Korea Development Bank is a state-owned bank. If they acquire the bankrupt Lehman Brothers, it's as clear as day that enormous losses will occur, and those losses will ultimately have to be borne by the people's tax money.
It's not my concern if the people's tax money is squandered in the wrong places, but this is a very good opportunity.
"I should hold a press conference."
"What? To stop the Korea Development Bank?"
"That's just an excuse; my real objective is different. It's a prophecy and a warning that the U.S. financial crisis will become a tsunami that engulfs Korea."
Chairman Lee Hakjae frowned.
"It's not a warning, but a scheme to detonate the bomb prematurely, I see."
"There aren't many days left. The moment Lehman goes bankrupt will be the signal for the collapse of the global economy. It won't make a difference whether I fire the signal or CNN News does, but I must use this opportunity to boost my credibility."
"Are you going into politics? What do you plan to use this accumulated credibility for?"
"That way, when I expose the corruption in Sunyang Group's succession process later, won't public opinion side with me?"
"Honestly, your petty schemes never end...."
As if to hide his surprise at my plan, he offered a useless rebuke.
"Hold the press conference two days from now. Local apartment complexes are currently underway. Since both Sunyang and Daehyun have dipped their feet into the mud, I'll push them further in."
I had suspected as much, but Chairman Lee Hakjae and I were quite in sync.
* * *
"The Bush administration is on the verge of injecting hundreds of billions of dollars in public funds. Over eight million homes have turned into ghost houses, Bear Stearns is beyond recovery, and the entire United States has frozen due to the non-recoverable status of mortgage-backed loans. I guarantee that Lehman Brothers cannot avoid bankruptcy."
"Director Jin Dojun. Is the Lehman Brothers you mentioned the very company that the Korea Development Bank is currently negotiating to acquire?"
"That's correct. There is only one Lehman Brothers."
"May we interpret this as meaning the Korea Development Bank's acquisition negotiations are misguided?"
"They're not just misguided; they're profoundly mistaken. No matter how much I think about it, I simply cannot understand it. When a company goes bankrupt, the value of its stock is zero. To buy a worthless asset for $26 a share? You'd be better off buying a discarded stone from the roadside with that money. At least then you'd have a tool to throw hard when you get angry, making it more valuable."
As the press conference progressed, anger slowly began to well up in me, but I kept my voice low.
"Have you already forgotten what happened ten years ago? As a result of squandering dollars recklessly, the suffering returned entirely to the people. The U.S. financial crisis has already cast a dark cloud over the global economy. Even preparing isn't enough, so pouring dollars into a doomed company is no different from an act of treason."
"Are you perhaps comparing this U.S.-triggered financial crisis to the IMF Crisis?"
"Fundamentally, it's the same. The only difference is that the epicenter is the U.S., not Asia."
As soon as the term 'IMF' was uttered, the reporters became agitated. They realized this was no time to sit back and watch from a distance, unconcerned about others' troubles.
"Mr. Jin Dojun, are you implying that a crisis like the IMF's is starting again?"
The IMF Crisis truly holds immense power. It's like a national trauma that can never be truly escaped.
"It depends on how we respond. In particular, strict analysis from each institution is required. We must absolutely not show any laxity."
These were the words of Korea's young Warren Buffett.
Economic newspapers ran my face on the front page as the top story, major newspapers featured my face on their economic pages, and even sports newspapers, practically entertainment magazines, printed my face.
Broadcasting stations were no different.
They knew that the titles of 'young genius investor' and 'Sunyang third-generation heir' were a sure-fire card that guaranteed viewership.
Though not the leading segment, they covered my conference with significant weight.
A chaebol had never before issued a warning to a state institution. Mostly, universities or economic research institutes took on this role.
It was a very rare occurrence, so it succeeded in drawing public attention, and public opinion was favorable to me.
Within a single day, the Korea Development Bank appeared to abandon its acquisition of Lehman Brothers. They retreated a step, stating that it was merely a review and no concrete plans had been made.
I also obtained the result I truly desired.
The economics professors at universities, who had remained silent, all opened fire, and many economic research institutes poured out research papers warning of a grim future.
Furthermore, when major foreign news outlets urgently broke the news that Lehman Brothers had filed for bankruptcy on September 14, 2008, with the astronomical figure of 700 trillion won, my name once again rose to prominence.
Thanks to that, I also gained additional benefits.
"Director. That press conference was truly a divine move. Haha."
Vice President Jang Dohyung burst into a pleasant laugh.
"Have you seen the media articles?"
"About me being a prophet?"
"Yes. 'Investment genius,' 'prophet'... such nicknames are now attached to you, Director. While the social elite always speak only of rosy futures, saying 'buy stocks,' 'buy houses,' and other things good for extracting money, you, Director, are the only one who has spoken honestly, warning of crisis and telling people to close their wallets."
"Compliments are useless. There must be a tangible benefit."
"The company of the most conscientious CEO. That's what our Sunyang Financial Group benefited from. Stock prices are rising, and customers are flocking to us. It's had a greater effect than hundreds of typical TV commercials. Haha."
Lehman Brothers' bankruptcy plunged our country's financial market into a state of panic as well.
Combining the KOSPI and KOSDAQ markets, the total market capitalization evaporated by 51 trillion won in a single day, and stock prices in the securities sector plummeted by over 12%, but Sunyang Securities was the only financial company to show the miracle of rising stock prices.
Vice President Jang Dohyung laughed heartily, yet subtly glanced at me.
"The reporters want to do follow-up coverage; what do you think? Should I arrange some interview schedules?"
"No. If I say more, my cards will be revealed. That much is enough. The public's curiosity must remain for them to keep listening to my words. More importantly, what about the Korea Development Bank? Did you handle what I instructed?"
"Yes. I treated the bank president and executives to a meal, and gave them some gifts. Enough so they wouldn't harbor any resentment over this matter."
"You did well. Now, we must be fully prepared. The domino effect of the global economic collapse is beginning. Make all investment decisions cautiously."
Predictions immediately emerged that the U.S. unemployment rate would increase by at least 10%, and Europe would be no exception.
Articles also reported that foreclosed homes in the U.S. already exceeded nine million units. The U.S. domestic economy would completely freeze.
If the U.S., the world's largest consumer nation, freezes, China, known as the world's factory, will also suffer enormous damage.
Signs of collapse were already visible in China's manufacturing sector. The number of unemployed exceeded ten million.
These unemployed individuals were laborers whose monthly wages barely amounted to $70 or $80.
When the upstream flow is disturbed like this, it is always the poorest people who suffer the most in the end.
Engineers built computers and spacecraft.
Financial engineers created the dream of getting rich, and in return, received salaries dozens of times higher than engineers.
But when a dream turns into a nightmare, the one who bought the dream is ruined, while the one who sold the dream suffers no harm at all.
The financial engineers of Wall Street, who caused this tragedy, on October 4th, threw another lavish party with George Bush's $700 billion government bailout.
The U.S. government became the largest shareholder by purchasing AIG Life's stock for $160 billion, and injected $15 billion into Goldman Sachs.
Morgan Stanley, immediately upon receiving government aid, paid $14 billion in bonuses to its executives, and Goldman Sachs' executives divided the entire government injection among themselves as bonuses.
Finally, Rachel from Miracle Investment's New York office sent an email with a photo of an account balance displaying the enormous figure of $56 billion, along with a single line of message.
Congratulation! World's Richest Person!
* * *
The U.S., facing a presidential election, had already injected over $7 trillion to extinguish this financial crisis, and planned to inject a similar amount in the future.
Though its status as a key currency was shaken, thanks to this, the tsunami of crisis seemed to halt in Europe.
As it became clear that Asia would only be hit by a powerful typhoon, at most, everyone breathed a sigh of relief and once again revealed their hidden greed.
As is always the case when a crisis strikes, the rich get richer, and the poor get poorer.
The new government, in an effort to overcome the economic slowdown and shrinking domestic demand, implemented extensive tax cut policies and eased reconstruction regulations.
Thanks to this, the chaebol conglomerates once again began to sing songs of prosperity.
"Perhaps your plan has been ruined. At this rate, we'll only make Sunyang Construction richer."
Chairman Lee Hakjae fretted as he checked the status board.
"They're taking out loans and trading on credit. If they can't collect their receivables, it's over for them. Don't worry, let Sunyang Construction and Daehyun Construction do as they please. If they want to build apartments, let them build; if they want to construct shopping centers, let them."
"Dubai is perfectly fine! Didn't you say it would collapse under the U.S. crisis?"
"It's festering. It still needs time to rot and crumble."
"The money we have tied up in those two companies is about to exceed 3 trillion won. It might even reach 5 trillion by next year."
"With that money, we might gobble up Sunyang Group's heavy industries division and Daehyun's construction affiliates. It's buying them cheaply, you see."
To Chairman Lee Hakjae, who was trembling with anxiety, I showed composure. We must spend more and give out more. Money is overflowing. I met with commercial bank presidents one after another, to spend more money—no, to deposit it.
The moment they saw me, they bowed their heads as if they had met a savior.