Thanks to Seok-won's advice and the group's early preparation, Daeheung Group managed to weather the crisis well. But most companies were struggling like sailboats caught in a raging storm, barely making it through each day.
Donghae Group was no exception. They had overreached by attempting a hostile takeover of Mido Department Store, and after the deal fell through, they had recklessly taken on foreign debt to clean up the aftermath—only to find themselves shackled by it.
In a spacious chairman's office adorned with antique furnishings, Chairman Woo Yong-gap sat on a sofa flanked by his senior executives.
Puffing on a cigarette and repeatedly glancing at the watch on his wrist, Woo Yong-gap looked sharply at Jeon Hae-chul, his chief of staff seated to his left.
"It's been ages. Why haven't we heard anything yet?"
"You know how hard it is to get cash these days. The discussion might be dragging on. Let's give it a bit more time."
Jeon tried to sound reassuring, but his own face remained tense.
"Damn it. At this rate, I'll burn out before this is over."
Chairman Woo stubbed out his cigarette roughly in a crystal ashtray overflowing with butts.
He reached into a wooden box on the table, pulled out another cigarette, and placed it between his lips.
Jeon, watching from beside him, silently flicked his lighter and lit it for him.
"Hoo..."
Puffing anxiously, Chairman Woo muttered, unable to hide his nervousness.
"This isn't going sideways, is it?"
"We've pledged the head office building and even your personal shares as additional collateral, just as the bank asked. It should go through."
"Of course it should."
He scowled again and puffed on the cigarette.
Just then, there was a knock, and the door opened. A middle-aged man of average height entered—it was Choi Byung-il, Donghae Group's CFO since last year.
Chairman Woo hastily stubbed out his cigarette and barked,
"What happened?!"
All eyes in the room turned to Choi, who hesitated with a troubled expression.
"Well…"
Seeing him unable to answer immediately, Chairman Woo raised his eyebrows sharply.
"What's with the silence?!"
Urged again with a loud voice, CFO Choi stood frozen near the door, wiping sweaty palms on his pants. In a faint, timid voice, he replied,
"Wooyoung Bank says… they can't go through with the loan as promised."
"What?!"
Chairman Woo Yong-gap glared menacingly and spat out his words.
"We gave them exactly what they wanted in collateral—so why the hell are they refusing the loan?!"
At the accusing tone, CFO Choi Byung-il, looking like a criminal on trial, raised one arm and wiped the sweat from his forehead with the back of his hand.
"Th-they did say that just a few days ago. But with the recent surge in the exchange rate, banks are also struggling to secure dollars. And more than anything, they say the wave of defaults has left them with too many bad loans, so they just can't afford to lend any more."
Before he could finish speaking, Chairman Woo slammed his palm onto the armrest of the sofa.
"Why the hell are you telling me this only now?!"
Veins bulging in his neck, he bellowed the words. Choi flinched and hunched his shoulders.
"If they were going to back out, what was the point of making us cough up additional collateral?!"
As Woo exploded with rage, Choi's head drooped lower and lower.
"I'm sorry."
"This is absolutely maddening."
Woo looked at the sweating CFO, standing there like a schoolboy being punished, with thinly veiled disgust. Then he yanked roughly at the knot of his tie with one hand.
The other executives held their breath, exchanging wary glances as if afraid the flames of Woo's anger might turn on them next. Finally, Chief of Staff Jeon Hae-chul spoke, his face grim.
"It looks like we'll have to give up on getting additional funds from Wooyoung Bank."
"Those bastards! Do they think this is a joke?!"
Grinding his teeth, Chairman Woo let out a stream of curses.
"We need dollars just to pay the interest to HSBC next month—this is driving me insane."
In the aftermath of his failed hostile takeover of Mido Department Store, which he had planned to use as a means to absorb Daeheung Group, Woo had borrowed $100 million from HSBC to patch things up.
It was a two-year loan with an annual interest rate of 9%, which had seemed manageable at the time.
But the economy had deteriorated rapidly since then. Instead of paying off the principal, Donghae Group's short-term foreign debt had ballooned to $280 million.
To make matters worse, the surging exchange rate meant their monthly interest payments had nearly doubled overnight.
For a group already drowning in debt, this was a crushing blow.
"The interest is bad, but what's worse is repaying the $100 million in principal due at the end of the year," Jeon added solemnly.
At that, Chairman Woo grimaced in frustration.
"We offered to pay a higher interest rate and asked for an extension. Still nothing?"
"I called again today and pleaded, but they flatly refused. They said no extension would be granted."
Chairman Woo's face contorted even further.
"Nothing's going right."
He bit his lip, trying to calm the rage boiling inside him, when Choi Byung-il hesitated, then reluctantly opened his mouth again.
"Uh… there's one more thing I need to tell you."
Still glaring at the CFO, Chairman Woo snapped with a barbed tone,
"Go on, let's hear it."
"The value of the securities and the equity in the holding company dropped due to the stock market crash... They want us to either provide additional collateral or repay at least part of the loan principal..."
"They refuse additional loans outright, and now they want this and that?!"
Chairman Woo Yong-gap cut off Choi Byung-il mid-sentence and yelled, his face flushed with anger.
Although Choi was merely delivering the news, he deeply regretted being in this position at that moment, bowing his head in embarrassment.
"How much collateral does Wooyoung Bank want?" Jeon Hae-chul, the Chief of Staff, asked with a stiff expression.
"It seems they want what we were planning to use as collateral for the additional loan."
"How much is that worth?! What are they asking for? These bastards aren't even using knives, but they're just like highway robbers!"
As Chairman Woo raged, Jeon Hae-chul paused for a moment before responding in a serious voice.
"It's an unreasonable demand, no doubt. But if Wooyoung Bank does call in the loan, our group will be insolvent that very day."
"Damn it!"
Chairman Woo cursed, slumping back into the sofa.
He let out a long sigh, muttering to himself with a self-deprecating tone.
"How did Donghae Group end up in this mess?"
He had dreamed of swallowing up Daeheung Group and making it into the top 30 in the business rankings. But now, everything was falling apart in the blink of an eye.
In fact, if he wasn't careful, he might lose everything he had and end up drowning in debt.
That night.
Heavy rain was falling outside, relieving the scorching late summer heat.
Chairman Woo sat alone in his study, drinking.
With a glass of whiskey and ice in hand, he took a sip before setting it down. Just as he did, a knock came at the door.
"Come in."
In a voice heavy with tension, he called out. The door opened, and his eldest son, Woo Ho-geun, entered the study.
He had recently been released from prison after serving a sentence for charges like stock manipulation and illegal loans, all of which had been proven. He had been released just a month ago under a special pardon for Liberation Day.
It was clear that Chairman Woo had used his influence to arrange for his son's parole.
Ho-geun, who had been quietly reflecting, glanced at his father's troubled expression before bowing his head.
"I'm here."
"Sit down."
Chairman Woo Yong-gap motioned with his chin toward the empty seat.
Ho-geun silently walked to the sofa on the right and sat down, while Chairman Woo picked up his whiskey without saying a word.
In the stifling atmosphere, Ho-geun nervously kept glancing at his father, waiting for him to speak.
After a long while of drinking, Chairman Woo set the empty glass down on the table and looked up at his son.
"You must have heard about the company's situation, considering you have ears."
"...Yes."
Chairman Woo, still seated on the sofa, picked up an envelope that had been prepared earlier and handed it to his son.
"What's this?"
Ho-geun asked as he took the envelope, but Chairman Woo leaned back, replying casually.
"It's a plane ticket."
"...?"
"You'll be leaving for the U.S. in three days. If you have anything to settle, take care of it."
Ho-geun opened the envelope and was startled to find a one-way ticket to New York. He looked at his father in surprise.
"Why the sudden trip to America... And I can't leave the country because I'm on parole."
"Don't worry about that. I've already made arrangements with the Ministry of Justice."
"...!"
Ho-geun swallowed nervously, sensing that something serious was happening. He focused intently on his father's words.
"When you arrive in New York, withdraw all the dollars in the U.S. branch account and transfer them to the offshore paper company in the Cayman Islands."
Donghae Oil/Yuryang, the parent company of the group, imported all of its soybeans, the main ingredient in their cooking oil, from the U.S. and South America.
In order to facilitate soybean imports, Donghae Group had established a separate corporation in the U.S. years ago.
Although the government strictly controlled foreign currency outflows, the group had been granted a special loan of $30 million from the Industrial Bank of Korea, which was transferred to the U.S. account. Now, Chairman Woo wanted to divert those funds.
"We'll file for a rehabilitation petition in court in fifteen days."
"Father!"
Ho-geun was shocked, his voice rising in disbelief.
Chairman Woo, looking at his son, continued in a heavy voice.
"We have debts of several billion to repay by the end of this year. We're struggling just to pay the interest, let alone the principal. If things continue like this, we won't last a month before we go bankrupt. If that happens, we'll not only lose the collateralized shares, but also the management rights of the group."
Ho-geun's eyes widened in shock.
Up until now, Ho-geun had been living a lavish life as the heir to Donghae Group, using his position to his advantage. But the thought that this could all be taken away from him filled him with a deep sense of loss and growing anxiety.
"Given the situation, you'll have no choice but to give up the management rights now. But in order to take the group back later, you'll need money. So, go out and manage the slush funds for now. Do you understand what I'm saying?"
"...Yes."
Woo Ho-geun nodded seriously, an expression he had never shown before.
"I will take care of things on this side to make sure there are no problems, but just in case… After you complete the transfer, leave the U.S. and go to a country that doesn't have an extradition treaty with Korea. You have a U.S. passport, so if you do that, the prosecutors won't be able to touch you."
"Yes."
Chairman Woo looked at his son's face, knowing that it would be the last time he would see him for a while.
"Be especially careful not to let anyone notice before you leave."
"I understand."