Golden Spoon Investment Portfolio - Chapter 380

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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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380. The Eldorado Fund? Those bastards again!

September 18, 1997.
In a small conference room of the Ministry of Finance building located in Chiyoda Ward, Tokyo, Shin Seung-gi and five other officials from the Ministry of Finance and Economy sat tensely in a row along one side of a long table.
Shin Seung-gi rolled up his sleeves to check the watch on his wrist, then picked up the teacup before him and took a sip of green tea, his throat parched.
Lee Dong-un, the section chief sitting beside him, glanced sideways and spoke cautiously.

“Should I go out and ask why they’re taking so long?”

Shin Seung-gi pondered for a moment, then shook his head.

“No. It’s only been about ten minutes. Let’s wait a bit longer.”

Though this was an unofficial visit, allowing a government delegation to wait without any prior notice or explanation was a clear breach of diplomatic protocol.
As Korea’s representative, I should have naturally lodged a protest and demanded an apology.
But since I had come seeking Japan’s assistance, I suppressed my displeasure with great effort.
After another five minutes had passed, I heard movement from outside, and then the door opened as a group of men entered.
Recognizing the face of Yoshikawa Daiki, the Ministry of Finance official who would be my negotiating partner today, Shin Seung-gi rose to his feet.
Then Yoshikawa Daiki, the Ministry of Finance official who had earned the nickname “Mr. Yen” for leading the Ministry’s exchange rate policy amid extreme currency fluctuations over the past few years and wielding considerable influence over the foreign exchange market, apologized first with a somewhat stiff expression.

“I apologize for keeping you waiting due to a lengthy meeting.”
“Not at all.”

The two men exchanged a brief conversation with the help of an interpreter, shook hands lightly, and then sat facing each other across the long conference table.
Watching Yoshikawa take a sip of green tea from the teacup the Female Secretary had placed, Shin Seung-gi could not contain his anxiety and asked first.

“What has been decided?”

Yoshikawa set down his teacup and gazed steadily at Shin Seung-gi sitting across from him, then opened his mouth in a measured tone.

“I’m afraid we will have difficulty accommodating your request.”

Shin Seung-gi, who had been filled with hope, felt his expression harden immediately at this disappointing answer.

“But yesterday’s conversation was positive, wasn’t it?”
“It was.”
“Then why has your position changed in just one day?”

Leaning forward on the sofa, Shin Seung-gi pressed urgently for an answer, and Yoshikawa Daiki responded with an impassive expression.

“As you’re aware, the United States is insisting strongly that support for nations facing difficulties due to this foreign exchange crisis must go through the IMF. I’m afraid it will be difficult for us to provide individual assistance.”

Shin Seung-gi immediately countered, attempting to persuade his counterpart.

“That’s precisely why I asked for support to be arranged between financial institutions rather than government to government, isn’t it?”

To evade American pressure insisting on IMF-mediated support, the Korean government had requested that Japan’s Cabinet indirectly assist through administrative guidance—specifically, that Japanese banks halt the collection of yen-denominated loans they had extended to the domestic market and extend the repayment deadlines.
At this point, roughly half of Korea’s foreign debt consisted of yen-denominated funds borrowed from Japan.
As large-scale capital flight of yen funds began, combined with the outflow of foreign investment already in the stock market and attacks from currency speculators, the upward pressure on the exchange rate intensified dramatically.

“I understand. We’ve also explored various ways to help, but the commercial banks are expressing strong concerns about Korea’s creditworthiness. Without exception, they’ve responded that loan extensions are impossible.”
“You mean they don’t trust the Korean government and Korean companies?”

Seeing Shin Seung-gi’s expression harden, Yoshikawa Daiki waved his hand lightly as if to dismiss the misunderstanding.

“That couldn’t possibly be the case. However, from the banks’ perspective, they cannot simply ignore the credit ratings assigned by international rating agencies, as doing so could potentially constitute a breach of fiduciary duty.”
“Hmm….”

When the mention of Korea and domestic banks receiving credit rating downgrades from the Big Three rating agencies—S&P, Moody’s, and others—left Shin Seung-gi speechless, he released a low sigh.
Seeing this, Yoshikawa Daiki continued.

“Furthermore, due to the ripple effects of the Southeast Asian foreign exchange crisis, the domestic economic situation is not favorable either, making it difficult for us to provide assistance. I’m truly sorry.”

Despite his words, neither Yoshikawa Daiki nor the other Japanese officials showed any trace of genuine apology in their expressions.
It was merely lip service.
Yet with foreign reserves melting away like snow in the sun as the government struggled to defend the exchange rate, Japan’s assistance was desperately needed, so Shin Seung-gi bit his lower lip firmly and clung to his plea with all pride completely abandoned.

“Might you reconsider this matter once more?”

But Yoshikawa Daiki rejected him coldly without so much as a flicker of his eyebrows.

“No matter how much you plead, our answer will remain the same.”

Shin Seung-gi now understood with certainty that Japanese assistance was not forthcoming, and his expression grew despondent.
Anger welled up at having been toyed with, as if they might grant the request until the very end, but it quickly faded, replaced by a bleak sense of foreboding about what fate awaited South Korea in its precarious position—like a candle flickering before the wind.

“Before the situation deteriorates further, wouldn’t it be better to seek assistance from the IMF?”

When Yoshikawa Daiki spoke with concern for Korea, Vice Minister Shin Seung-gi’s face flushed with emotion.

‘Despicable bastards!’

He barely restrained the curse that threatened to burst from his throat.

“Surely you’re aware of how harsh the conditions the International Monetary Fund demands in exchange for assistance are.”

At his sharp tone, Yoshikawa Daiki shrugged and replied with a slight sneer.

“Of course, but isn’t it better than exhausting your foreign reserves and falling into a moratorium?”

A moratorium meant a situation where a nation, unable to repay its foreign debt, temporarily declares a suspension of all debt payments.
Yoshikawa Daiki’s blunt assertion that Korea would fail to withstand the assault of currency speculators made Vice Minister Shin Seung-gi clench his lips and respond curtly.

“I appreciate your concern, but that won’t happen.”
“I hope you’re right.”

Yoshikawa Daiki answered in an insincere tone.
Vice Minister Shin Seung-gi and his delegation, deeply insulted by such an attitude, clenched their fists beneath the table and trembled with rage.
In the end, contrary to their hopes, Vice Minister Shin Seung-gi’s delegation left the Ministry of Finance empty-handed and made their way back to Korea in somber silence.

* * *

Meanwhile, after concluding talks with the Korean delegation, Yoshikawa Daiki promptly ascended to the Minister’s Office on the top floor of the Ministry of Finance.
As he passed through the door opened by the Attached Office staff and entered, Minister Sato Kazuya, a three-term Diet member, straightened his posture at his large wooden desk.

“How did it go?”

Yoshikawa Daiki approached and answered as he looked at Minister Sato.

“As instructed, I refused their request, saying we cannot provide assistance.”
“Did they accept it readily?”
“They pleaded for reconsideration once more, but when I flatly refused, they had no choice but to give up.”

Minister Sato then smiled with a cold edge.

“After all, what can those insignificant fools do when we refuse? Isn’t that right?”
“Precisely, sir.”

However, Yoshikawa Daiki sensed something slightly troubling and cautiously broached the subject.

“If Korea receives IMF support or declares a moratorium as things stand, the repercussions will reach us in Japan as well. I’m uncertain whether we can simply leave matters as they are.”

Minister Sato interlaced his fingers and rested his hands upon his knees before responding.

“There will certainly be damage. But only then will the United States bestir itself to prevent the situation from deteriorating further.”

As Yoshikawa Daiki nodded in agreement, Minister Sato continued.

“And even if we wished to aid Korea, the Prosecution is currently investigating collusive relationships between the Ministry of Finance and financial institutions. How could we ask the banks to extend the maturity of funds lent to Korea?”

He clicked his tongue in disapproval.

“The economy is already struggling and the stock market is in shambles, yet they insist on expanding the investigation to all financial companies. I cannot fathom what the Prosecution is thinking.”

Irritated, Minister Sato regarded Yoshikawa Daiki with a grave expression and posed a question.

“How long do you think Korea can endure?”
“Given that their foreign exchange reserves were never substantial to begin with, and considerable amounts have been depleted defending the exchange rate, I would estimate no more than a month.”

“A month, then… That means the change of administration will occur before the presidential election—a foregone conclusion.”
“That appears to be the most likely scenario.”

Minister Sato nodded and, remaining seated, crossed his arms as he spoke.

“When Korea surrenders, the fallout will inevitably reach Japan in some form. Particularly, we must prepare thoroughly to ensure the exchange rate, already weak, does not plummet to dangerous levels.”
“I shall see to it.”
“I wish the ravenous hedge funds would be satisfied with Korea as their final feast, but I doubt it will be so simple… They are as insatiable as starving demons.”

As Minister Sato muttered thus, a knock suddenly sounded, and a staff member from the Attached Office burst through the door with an urgent expression.

“Forgive the interruption.”
“What is the matter?”

Minister Sato furrowed his brow.
The staff member approached hastily and conveyed the urgent news.

“Yamaichi Securities just filed for bankruptcy.”
“What did you say?”

The news struck like a thunderbolt, and the Finance Minister’s eyes widened as he demanded clarification.

“Is that really true!”

Yoshikawa Daiki, who stood beside him, also stared at the employee with undisguised shock written across his face.

“Yes. They just submitted a voluntary closure report to our Ministry of Finance.”
“This is… what is this…”

Yamaichi Securities was one of Japan’s Big Four Securities Firms with a history spanning over a century, so their bankruptcy was no ordinary matter.
The Finance Minister’s expression darkened as it became painfully clear that this would send shockwaves through Japan’s already stagnant economy and stock market.

“What on earth is the reason!”

The Finance Minister’s sudden outburst caused the Attached Office employee to shrink back as if it were his own fault, stammering out a response.

“Apparently, fraudulent accounting that concealed massive losses was exposed, and on top of that, they incurred another massive loss they cannot bear from a CDS options contract recently entered into with the Eldorado Fund.”
“The Eldorado Fund? Those bastards again!”

The Finance Minister slammed his palm against the desk, venting his fury. Meanwhile, Yoshikawa Daiki turned to the employee with a question.
In the meantime, Secretary Yoshikawa asked the staff member.

“Two billion dollars, sir.”
“It’s said to be 2 billion dollars.”

The Finance Minister also furrowed his brow and cried out.
Minister Sato also frowned and let out a shout.

“Yes, understood!”
Yes, I understand!

He had made excuses to the Korean side about Japan’s poor economic situation, but now an uneasy dread crept over him—what if things truly became that dire?
I made an excuse to the Korean side by saying Japan’s economic situation wasn’t good, but then I was seized by anxiety that it might actually become serious.

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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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