Korea Investment & Securities, Hanna Group, Dongseo Securities, Cheonggu Group.
These were the large corporations that collapsed within just one month of Korea requesting an IMF bailout on November 21st.
The Korean won plummeted, reaching over 1,200 won per dollar and approaching 2,000 won. Companies that had relied on foreign loans saw their debts triple overnight thanks to the skyrocketing exchange rate.
Even securities companies, once considered unshakeable, crumbled under the weight of bad debts, the soaring exchange rate, and a wave of bank runs as people panicked and withdrew their deposits. Korea was in shock.
The IMF, responding to the Korean government's desperate pleas for foreign currency, provided an emergency loan of $5.5 billion, followed by $16 billion in December. They planned to provide another $10 billion in January, but with harsh conditions, such as raising the interest rate to 29.8%, further strangling businesses and citizens who were barely surviving.
But the Korean government had no choice and accepted the IMF's terms. The initial $16 billion provided some relief, but no one believed the crisis was over.
Everyone was tightening their belts, trying to save every penny, while Park, a businessman running a small company in a corner of Ansan, was holding $1 billion in foreign currency, observing the situation and weighing his options.
"This is unbelievable. My assets doubled just from the exchange rate fluctuation."
Over half of the $1 billion was in yen and yuan, but the currencies of the two countries that had escaped the Asian financial crisis were still valuable.
Japan's economy was on a different scale than Korea's, and China, far from experiencing a crisis, was enjoying double-digit economic growth thanks to massive foreign investment.
Chunha Trading's reserves had exceeded $1 billion, thanks to these three currencies.
At the current exchange rate, it was worth over 2 trillion won.
"It's over 2,000 won per dollar now, right?"
Park Jong-bum nodded.
"Yes, it peaked at 2,100 won earlier today and then fell back to 2,000 won."
The thought that the 1 trillion won I had painstakingly accumulated had doubled to 2 trillion won in just one month felt surreal.
"Is this what they mean by 'managing your finances well'?"
"This is a bit different…"
"Do you think it'll go up further?"
Park Jong-bum said with a troubled expression,
"I'm not an expert on economics… but if it goes up any further, Korea might collapse."
"Hmm."
Although I had profited from Korea's crisis, I didn't want the country to collapse.
It wasn't about patriotism. It was just that as a Korean, I was most comfortable living and working in Korea.
And there was a difference in credibility between a businessman from a developed country and one from a developing country.
Whose words would you trust more: a Japanese businessman or a Somali businessman?
So Korea's collapse wasn't a desirable outcome for me.
"Surely it won't collapse, right?"
"I hope so, but looking at the current situation, I can't be sure."
"What should we do?"
With $1 billion in hand, I had many options.
I could hoard the money, anticipating Korea's collapse, or I could invest in undervalued assets, betting on Korea's recovery.
I could even use the foreign currency as leverage in negotiations with the government. I had the upper hand.
I licked my lips.
"This is an opportunity. How should we use it?"
$1 billion was a huge amount for an individual, equivalent to 5% of the $20 billion Korea had requested from the IMF. But it was a drop in the bucket for the entire country.
However, for specific regions or companies, $1 billion could be a lifeline.
"Let's assume Korea won't collapse. They're short on foreign currency, but Korea's GDP last year was over $500 billion. They're struggling now because of the $20 billion bailout, but they'll recover eventually. I don't know if the exchange rate will go up or down, but now is the best time to make a move."
My intuition was also tingling, urging me to seize the opportunity.
Park Jong-bum nodded.
"I'll proceed with that assumption. But what business are you planning to invest in? Most industries are struggling, and we already control the secondhand and junkyard markets in Korea. The investment returns would be minimal. There's nowhere to invest 2 trillion won."
I thought for a moment.
"Well, the more companies go bankrupt, the more money we make, right?"
"That's right."
"So I was thinking, instead of just acquiring distressed inventory from bankrupt companies, let's acquire the entire companies."
"What?"
I continued, looking at his puzzled expression,
"You know those investment companies in China? They make money effortlessly. I was so envious."
Park Jong-bum's eyes widened.
"Are you planning to become a loan shark, targeting companies?"
"It's similar. What do you think?"
"I don't think it's feasible. The situation in Korea is different from China. Even banks are struggling to collect their loans. If we jump in now, we might lose our money."
"Investment companies don't just lend money and collect interest. Think about Chen Fei. He didn't just lend money, he also attacked when necessary. Although he failed because of me, his method wasn't bad."
"What?"
"You've seen what we do. We create value from trash, and that's how we make money. It's the same with other things. There are plenty of valuable assets out there, but people can't touch them because they're short on cash."
Assuming Korea wouldn't collapse, there were plenty of opportunities.
Companies with great technology and vision but struggling with financial difficulties, real estate properties flooding the market due to bankruptcies and foreclosures…
They were all built with someone's blood, sweat, and tears, but now they were just carcasses in the capitalist ecosystem.
And I knew better than anyone how to dissect and consume those carcasses.
My eyes gleamed.
"We'll provide loans if they need loans, investments if they need investments. We'll absorb everything."
Park Jong-bum said with a worried expression,
"It's not that easy. The Korean market is volatile right now. There's nothing certain. A wrong investment could wipe you out. We need to be cautious."
"Of course, we'll conduct thorough due diligence before investing. But I think now is the perfect time to invest."
As we were discussing loans and investments, Maru, who had been silent, said with a troubled expression,
"Loans and investments are fine, but over 80% of our reserves are dirty money. Won't that be a problem?"
I clicked my tongue.
"You're usually so level-headed, but you say such naive things sometimes. Do you think the Korean government cares about clean or dirty money right now? They're desperate for foreign currency, they would be on their knees, thanking us, if we brought it in."
Maru frowned.
"Who doesn't know that? They might welcome us now, but what happens after the crisis is over? What if they investigate us later? It won't be as easy to get away with it as the jackpot incident."
His words made me think.
The public, enraged by the IMF crisis, which had occurred during the final days of the Kim Young-sam administration, had elected Kim Dae-jung, an opposition party candidate, as the new president.
President-elect Kim Dae-jung would welcome any foreign investment with open arms, but the problem was what would happen afterward.
If I made a deal with the incoming Kim Dae-jung administration, laundered my dirty money, and used it for investment, and then the ruling party changed again and I was investigated, I would be in serious trouble.
I clicked my tongue.
"You're right. That could be a problem."
"So we need to be cautious…"
I interrupted Maru.
"This is perfect. It's not fully developed yet, but maybe it's time to deploy it."
Maru looked puzzled.
"What's not fully developed?"
"The fake identity."
"What? The fake identity? That was a long-term plan, wasn't it?"
The original plan was to have the fake identity accumulate wealth through a fictional business and then acquire Chunha Trading's dark side operations. But the situation had changed.
"That was before this opportunity presented itself. It's actually better to use it now than two years later."
I clapped my hands.
"Yes! The fake identity will enter Korea as a Chinese investor. The government won't refuse billions of dollars in foreign currency, regardless of the reason. It'll be perfectly natural."
This was only possible because of the change in government and the IMF crisis.
Under normal circumstances, the Korean government wouldn't welcome Chinese investment.
That's why the original plan was to have the fake identity acquire Korean citizenship first.
Maru said, dumbfounded,
"But it's not even complete yet! You said his fictional business only generated a few billion won in sales. He's not influential enough to handle trillions of won!"
I said calmly,
"It's okay. It's all fake anyway, so we can just create a more elaborate backstory."
"What?"
"The fake identity, while doing business in China, met a wealthy investor. He convinced the investor to invest in Korea and came here as his representative. Isn't it a perfect story? He enters Korea with the investor's money, establishes an investment company, and starts making a fortune."
I said excitedly,
"We can say that Chunha Trading, struggling with financial difficulties, sold its dark side operations to the fake identity's investment company. It'll be a natural acquisition, and we'll even gain sympathy!"
I continued, looking at Maru's dumbfounded expression,
"Chunha Trading will maintain its image as a socially responsible company that hires the disabled and the underprivileged, while the fake identity will be exploiting companies behind the scenes. Good. Let's do it."
Maru, seeing my satisfied smile, said,
"The worst kind of villain is the one who pretends to be a saint."
"Hahaha, what do I care? As long as we make money and don't get caught!"
"By the way, what was the fake identity's name again? I can't remember."
I smirked.
"Remember this name. He's going to show Korea the true power of Chinese capital. Baek In-hwi. The fake identity's name is Baek In-hwi."