Golden Spoon Investment Portfolio - Chapter 295

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This chapter was translated by Lunox Novels. To support us and help keep this series going, visit our website: LunoxScans.com
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295. The Daeho Construction project must not resume.

A few days later.
A large Mercedes sedan carrying Seok-won glided to a stop before the gates of the Hannam-dong Main House.
As Han Ji-sung, who had exited first, opened the car door, Seok-won stretched his long legs and emerged from the back seat.
Mid-August had arrived, and while the worst of the heat should have broken by now, the record-breaking heatwave still clung to the air—sweat beaded on the skin even while standing motionless.
As Seok-won began walking, Han Ji-sung hurried ahead and pressed the doorbell mounted on one of the gate pillars, announcing his arrival.

“The young master has arrived.”

Immediately, a sharp beep sounded, and the electronic lock on the iron gate disengaged.
As Seok-won passed through the tall walls and crossed the meticulously maintained Garden toward the main house with Han Ji-sung at his side, a calico cat family emerged from the shrubs with melodious meows.
Though it had been only weeks since his last visit, Mackerel Tabby and her kittens approached with tails held high, weaving between his legs with affectionate rubs, clearly delighted to see him.
Seok-won smiled warmly and bent down to stroke the cats.

“You rascals. Your coats are gleaming—looks like someone’s been spoiling you with good food.”

Just then, Mackerel Tabby’s youngest—the only male—scratched at his leg with his front paws as if to ask where his treats were.

“Ah, I forgot to bring anything today. But next time I’ll bring you plenty of cat treats.”
“Meow.”

The youngest lifted his head and looked up at him, meowing as if in understanding.

“You little rascal. How do you even understand what I’m saying?”
“Mew.”

Seok-won chuckled at the kitten’s responsive meows, clearly enjoying their exchange.
After playing with the cat family for a moment, Seok-won resumed his walk and entered the main house.

“You’re here?”

Jo Deok-rye, dressed in a comfortable housedress, stepped out to the entrance as she always did, greeting her son warmly after his absence.

“Welcome home, sir.”

Beside him, the Gunsan Housekeeper, wearing an apron, also smiled and bowed her head respectfully.

“Madam Jo. You seem to have grown even younger since we last met.”
“What?”

Jo Deok-rye, her expression one of exasperation at Seok-won’s shameless flattery, shook her head.

“This boy’s nerve just keeps growing thicker.”

Yet sensing she wasn’t truly displeased, Seok-won burst into laughter.

“Haha. You’ve been well, I hope?”
“Well enough, I suppose. With only two children and both of them away from home, it’s been rather lonely.”
“Then shall I move back in?”

At Seok-won’s words, Jo Deok-rye gave him a sidelong glance and waved her hand dismissively.

“Don’t say things you don’t mean. Come inside now. Your father and brother are in the Study Room, so go greet them first.”
“Yes, ma’am.”

After removing his shoes, Seok-won made his way inside toward the Study Room.
He knocked lightly and opened the wooden door to find Chairman Park Tae-hong, dressed casually, seated on a leather sofa with his eldest son, Park Jin-hyung, president of Daeheung Textiles.
Chairman Park Tae-hong, positioned at the place of honor in the center, gestured for Seok-won to enter.

“Come in.”
“I hurried here as fast as I could, but I’m still the last to arrive.”

Seok-won apologized and sat down on the vacant sofa to the right.

“How can you be late when you’re the one who said you had something to discuss?”
“My apologies.”

Park Jin-hyung, seated across from him, chided him playfully, and Seok-won responded with a laugh.
Unlike other conglomerate families plagued by succession disputes, the two sons maintained a close bond, and Chairman Park Tae-hong’s lips curved into a faint smile before his expression shifted as he spoke.

“Don’t be too hard on him. We’re only able to see each other like this because Seok-won called us together, aren’t we?”
“Yes, sir.”

Chairman Park Tae-hong said “anyway” and turned his gaze toward Seok-won.

“Have you heard that Chairman Woo is putting Donghae Medical on the market?”

Donghae Medical was a manufacturer of disposable medical supplies like syringes—one of the medical device subsidiaries that Chairman Woo Yong-gap had been cultivating as a future revenue stream for the group alongside his financial operations.
Seok-won, who had learned of the sale early through Lee Chul-gyun, answered with a composed expression.

“Isn’t this the price he’s paying for pushing through that hostile M&A so recklessly?”
“Exactly. He coveted what belonged to others and now finds himself forced to sell off the very companies he once held. This is karma in its purest form. When Manager Gil told me the news, it felt like a ten-year weight had finally lifted from my chest.”

Chairman Park Tae-hong answered with evident satisfaction.
It was a testament to how much resentment had accumulated against Chairman Woo Yong-gap and the Donghae Group—after all, they had attempted to seize the entire group that his predecessor had founded.
His eldest son, President Park Jin-hyung, also spoke as though pleased with the turn of events.

“I hear that the Donghae Mutual Credit Union and Donghae Peregrin Securities, which extended those illegal loans, will face quite severe penalties once the Securities Supervisory Authority completes its investigation.”
“Hmph. As it should be.”

There were also rumors that Donghae Peregrine Securities might dissolve its joint venture partnership with Peregrine Securities in Hong Kong, in addition to facing the regulatory investigation.

‘Because of the bonds Peregrine Securities handed over to me, they were forced to surrender the Seocho-dong headquarters site they had cherished. Their teeth must be grinding—continuing together will become difficult.’

Perhaps one reason for selling off Donghae Medical was to raise funds to acquire the shares held by Peregrine Securities Hong Kong.
Chairman Park Tae-hong lifted the teacup before him, took a sip of coffee, set it down, and spoke while looking at his eldest son.

“By the way, Wei Jizhong mentioned that if we resume the suspended Phase 2 construction of the Shenyang Manufacturing Plant 2, he would grant additional tax exemptions, didn’t he?”
“Yes. He said they would completely waive the taxes on materials and machinery needed for factory construction, reducing them from the current 50% to zero.”

“That means we could save several million dollars in construction costs, wouldn’t we?”

Chairman Park Tae-hong asked with an intrigued expression.

“Yes. It seems the central Chinese government is eager to accelerate the project by offering additional incentives, since economic growth rates heavily influence their performance evaluations of provincial governors.”
“Since we’ve already settled the Midopa Department Store situation to a reasonable degree, I was planning to resume construction soon anyway. If they’re offering additional benefits, there’s no harm in restarting the project a bit earlier. What’s your opinion?”
“I share the same view.”

Then Seok-won, who had been listening quietly, suddenly interjected.

“I think it might be worth reconsidering that decision.”

Seok-won, who deliberately avoided involving himself too much in Daeheung Textiles, which his older brother Park Jin-hyung managed, to avoid any misunderstandings, caused Chairman Park Tae-hong to narrow his eyes slightly in surprise.

“What do you mean by that?”

Park Jin-hyung also looked at him with a puzzled expression.
Since this connected to what Seok-won had intended to discuss today anyway, he met their gazes with a serious face and began to speak.

“We won the battle against Donghae Group, but we also strained ourselves preventing their hostile M&A. Now is the time to suppress expenditures as much as possible and strengthen our fundamentals.”
“Hmm. I see where you’re going with this.”

Chairman Park Tae-hong leaned back against the sofa as he spoke.

“But business has its seasons. The second phase of construction needs to be completed anyway, and wouldn’t it be better to restart the work when the local government offers additional incentives?”

Park Jin-hyung also nodded in agreement.

“Liaoning Province, which lies north of Korea, experiences winters far more severe than anything in Korea. If we don’t restart construction now, we won’t be able to resume until spring at the earliest next year. That delay will significantly increase construction costs.”

From their expressions, it was clear they had already made up their minds to resume factory construction.

“We’ve depleted most of our reserves defending management control. There won’t be much cash left in the textile company. How will you cover the construction costs?”
“We’ll receive export payments for cotton yarn in the second half of this year. If we secure export loans against that, there shouldn’t be any problem financing it.”

Seeing that they had already devised a financing plan, Seok-won leaned forward in his seat.

“If you’re in a situation where you need to use the dollars from export payments, then you absolutely cannot restart construction.”

At Seok-won’s strong opposition, Chairman Park Tae-hong sensed something amiss and asked with a stern expression.

“Explain why not in a way I can understand.”

Park Jin-hyung also furrowed his brow slightly as he looked at his younger brother.
Under their questioning gazes, Seok-won composed himself and spoke calmly.

“You’ve probably heard that the Bank of Korea recently announced a first-half current account deficit of 1.166 billion dollars.”
“….”
“That’s a 79.4% increase from 650 million dollars in the same period last year. Moreover, DRAM prices, which were trading at fifteen to seventeen dollars per unit until early this year, have dropped by two to three dollars, so the deficit will certainly grow larger.”

Seok-won continued speaking while facing the two men who listened quietly.

“Exports are showing rapid deceleration like this, but conversely, raw material imports and factory equipment purchases have increased compared to last year, playing a major role in widening the trade deficit.”

Despite the rapidly shifting global economic landscape, Seok-won’s expression betrayed his inner contempt for the complacent domestic enterprises that failed to grasp these changes swiftly, clinging instead to the naive optimism that because exports had performed well until now, they would continue to do so.

“If exports recover, that would be fine, but the problem is that the reverse Plaza Accord has weakened the yen, making Japanese products more price-competitive. This means exports won’t grow as easily as before. Inevitably, companies will struggle under the burden of excessive investment debt and inventory, which will only deepen an already flagging economy.”

Chairman Park Tae-hong and President Park Jin-hyung’s expressions hardened as they grasped the gravity of the situation.
If the domestic economy contracted, the sales of Midopa Department Store—which served as the cash cow for the Park Group—would inevitably plummet as well.

“In these circumstances, there’s one more adverse factor that will strain the economies of Korea, Taiwan, and other Asian export nations.”
“What is it?”
“Starting in March of the year after next, Japanese banks will need to meet a BIS capital adequacy ratio of 10%.”

The BIS capital adequacy ratio referred to the self-capital ratio standard recommended by the Bank for International Settlements to commercial banks to mitigate insolvency risk.

“Why would that be a problem?”

President Park Jin-hyung tilted his head, asking the question.

“After the bubble burst, the ultra-low interest rate policy implemented by the Japanese Government caused massive yen funds to flow out of Japan and into foreign markets.”
“That’s true.”

President Park Jin-hyung nodded in agreement.

“And you’re aware that this gave rise to a new investment method called the yen carry trade—borrowing yen at cheap rates and investing in high-growth emerging markets to reap profits.”

The vast sums of yen that poured out of Japan in this manner played a substantial role in inflating bubbles across Asia.

“So Japanese banks have scattered enormous amounts of yen abroad, and now they’re suddenly forced to raise their capital adequacy ratio to 10%. What do you think they’ll do?”
“Hmm.”

President Park Jin-hyung exhaled softly, grasping the implication.

“The Japanese banks will attempt to recover the money they’ve lent out en masse.”
“Exactly. We can’t know the precise amount, but certainly a significant volume of yen carry trade capital has flowed into Korea. If even half—or even a third—of it suddenly withdraws, won’t the liquidity in the market dry up catastrophically?”

Chairman Park Tae-hong’s expression grew grave as he listened to his sons’ exchange.
Seok-won pressed on with even greater intensity.

“And if you consider that our current account deficit means more dollars are flowing out than coming in, we could very well face a foreign exchange crisis.”

At his shocking prediction, both of them widened their eyes and stared at him intently.

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This chapter was translated by Lunox Novels. To support us and help keep this series going, visit our website: LunoxScans.com
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