Golden Spoon Investment Portfolio - Chapter 393

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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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393. I wish I could modify the transaction details somewhat.

Kabutocho, located in Chuo Ward, Tokyo, was one of the most prominent financial centers not only in Japan but in the world.
True to its reputation, the Tokyo Stock Exchange stood at its heart, surrounded by major commercial banks, securities company headquarters, and Japanese branches of foreign financial institutions.
Each morning, the streets bustled with financiers dressed in fine suits and ties, briefcases in hand, making their way to work.
As the elevator doors opened, John Porter, the branch manager, stepped out with measured strides, his Italian handmade shoes and luxury watch gleaming beneath the fluorescent lights.
Walking down the carpeted corridor toward the reception desk bearing the English logo “Eldorado Fund Japan Branch,” a striking female secretary rose from her seat and bowed with a gracious smile.

“Welcome, Branch Manager.”
“Good morning.”

Porter acknowledged her greeting in fluent Japanese and proceeded toward the reinforced glass entrance doors.
He retrieved his photo ID and held it to the reader mounted on the right wall, and the glass door slid open silently.
Upon entering, the first thing that caught my eye was the expansive Trading Floor, dominated by a massive market ticker board spanning an entire wall, with each desk equipped with at least two or three monitors.
Beyond the floor-to-ceiling windows stretched the glittering Tokyo skyline, its towering buildings densely packed against the horizon.
Against this backdrop, the staff moved with practiced efficiency, their hands dancing across keyboards and phones.
The workforce had grown considerably over time, with more than thirty employees now on the payroll.
I paused briefly to survey the traders, who were busily preparing for the market opening by reviewing overnight information and market conditions, before turning toward my office in the inner section.
After exchanging greetings with my secretary, I entered the branch manager’s office, removed my jacket, hung it on the stand, and settled into my chair.
On my neatly organized desk lay the Nikkei Newspaper, Japan’s leading economic publication, alongside a summary report of overnight developments in European and American markets.
Just as I was about to unfold the report, Rider suddenly burst through the door without knocking, his face flushed with urgency.
He announced the breaking news with barely contained excitement.

“Branch Manager! Sanyo Securities has just filed for corporate rehabilitation proceedings at the Tokyo District Court!”

I jolted upright in shock, my voice sharp with disbelief.

“Is that really true?”
“Yes. The announcement just came through moments ago.”

Upon hearing this, I immediately pulled up Sanyo Securities’ announcement on my computer to verify.

“It’s genuine.”
“It appears that life insurance companies providing unsecured subordinated loans to Sanyo Securities refused to extend their maturity terms despite requests from the Ministry of Finance for cooperation. This refusal became the decisive trigger for their collapse.”

When the subsidiary’s massive real estate loans collapsed along with the bubble, Sanyo Securities absorbed the losses, and their financial situation deteriorated rapidly.
As the market downturn compounded the losses, the damage grew exponentially. For the past three years, under the Ministry of Finance’s direction, they had been attempting reconstruction with support from their primary bank and major shareholder Nomura Securities, striving to improve their operations.
That made Sanyo Securities’ collapse all the more shocking.

“The total debt reaches 373.6 billion yen, and among the fourteen affiliated subsidiaries, eight are likely to be liquidated and six to enter liquidation proceedings.”

Porter stood with his arms crossed as he spoke.

“The fact that such detailed information has been released suggests the Ministry of Finance has already decided on liquidation rather than restructuring.”
“I share that assessment.”

Rider spoke with evident anxiety.

“Once the court accepts the company rehabilitation petition, trading will be suspended immediately. Shouldn’t we liquidate our positions before that happens?”

Under Seok-won’s orders, Porter had been short-selling stocks of four financial companies, including Sanyo Securities.
Porter stroked his cleanly shaved chin thoughtfully with one hand before reaching a decision.

“Our average selling price for Sanyo Securities was 198 yen, correct?”
“Yes, that’s correct.”
“Good. Then let’s maintain the position as is.”
“Are you certain that’s wise?”

Porter flashed a broad grin at the slightly concerned look.

“Since this is the first time a listed securities company has collapsed, the Ministry of Finance won’t rush the liquidation process—they’ll want to minimize the shock to the market.”
“That’s likely true.”
“So there will be a closing auction soon. If we liquidate our position then, we can maximize our profits.”

Rider’s face brightened at the explanation.

“That makes sense.”

A closing auction was the final trading opportunity offered to investors for stocks delisted, as a measure of investor protection.

“Monitor the Ministry of Finance’s movements closely, and watch the situation at the other three companies where we hold short positions. This bankruptcy will certainly have ripple effects on other financially troubled institutions.”
“Understood.”

After Rider gave a brief reply and left, Porter Branch Manager settled back into his chair.
He moved his mouse and pulled up Sanyo Securities’ stock price on his monitor.
The stock market, which had just opened, was plummeting sharply with a gap down on news of Sanyo Securities’ corporate rehabilitation filing.
Financial stocks in particular were experiencing a dramatic collapse, and Sanyo Securities—the epicenter of the shock—was in free fall as panic selling ensued.

[Sanyo Securities: 99.21 (
↓31.16)]

As the stock price plunged below the 100 yen mark in a single stroke, Porter Branch Manager’s face broke into a broad smile.

“I had my doubts, but Sanyo Securities really did collapse. The boss’s foresight never ceases to amaze me.”

It was an ability worthy of endless admiration.
As he contemplated how much profit this bet would generate, Porter Branch Manager’s smile deepened.

***

[Shock! Tokyo Stock Exchange Ranking 7th “Sanyo Securities” Collapses]

The bankruptcy of Sanyo Securities, a major mid-sized securities firm ranked seventh in the industry, sent shockwaves across the Korean stock market and foreign exchange market beyond the Korea Strait.

Ring! Ring!
“You said 5.11?”
“Say it again!”
“We can’t do that price. It just went up again!”
“Okay. Done!”
“How am I supposed to handle this when the exchange rate keeps climbing!”

As phones rang incessantly, foreign exchange traders gripped receivers in both hands and shouted at the top of their lungs, veins bulging in their necks.
Their eyes fixed intently on the monitors as they frantically hammered away at keyboards, executing foreign exchange transactions in a frenzy.
Contrary to expectations, negotiations with the IMF delegation had stalled, and as a result, the exchange rate had begun surging again several days prior.
As if misfortune weren’t enough, news of Sanyo Securities’ bankruptcy accelerated loan recoveries by Japanese financial institutions, intensifying upward pressure on the exchange rate.
Na Un-hak Deputy, having just completed a transaction and set down his receiver, gazed at the won-dollar exchange rate displayed on the large market board and, looking frustrated, loosened the knot of the necktie around his neck.

“Damn it. At this rate, I’m not sure the exchange rate won’t actually reach 1,500 won.”

[USD/KRW: 1,405.11]

Considering how the exchange rate, which had seemed to stabilize in the 1,100 won range, had surged this dramatically in less than a week, 1,500 won was hardly an impossible threshold.
With the government now barely defending the exchange rate, the upside was essentially wide open.

“This could turn into a real disaster. What are they doing not wrapping up negotiations faster?”

Na Un-hak muttered irritably, his brow furrowed.
The frustration made him crave a cigarette, but he couldn’t leave his post during trading hours, so he had to restrain himself.
Just then, another phone rang loudly, and Na Un-hak grumbled as he picked up the receiver.

“They won’t even give me a moment’s rest.”

As the exchange rate pierced through the ceiling and the stock market plummeted through the floor into the basement, the Korean government found itself increasingly cornered in the negotiations.

***

That night.
In the same Sogong-dong Lotte Hotel suite where they had met before, Seokwon sat across from Choi Jin-woo, the Deputy Prime Minister for Economic Affairs.
Noticing how much more haggard the Deputy Prime Minister’s complexion had become in just a few days, apparently from severe stress, Seokwon spoke first.

“The negotiations don’t seem to be going well.”

Deputy Prime Minister Choi Jin-woo let out a long sigh.

“It’s not as easy as I initially expected.”
“That’s likely because the IMF is placing greater emphasis on financial market liberalization and other matters rather than resolving the foreign exchange crisis.”

Deputy Prime Minister Choi Jin-woo, apparently having accumulated much frustration, laughed bitterly and continued.

“You’re right. The way they’re acting, it feels like I’m watching thieves who came not to help but to exploit our predicament and strip us bare.”

The words rose to Seokwon’s throat—that they had brought this upon themselves through complacency despite having sufficient time to prepare—but he swallowed them and remained silent.
Instead, he quietly picked up the bottle and poured whiskey into Deputy Prime Minister Choi Jin-woo’s glass.

“President Davidson called directly today and spoke with the President.”

Seokwon’s expression showed slight surprise as he spoke.

“President Davidson called while he’s on vacation at Camp David?”
“Yes, he did.”

Choi Jin-woo, the Deputy Prime Minister for Economic Affairs, nodded heavily.

“He apparently urged that Korea’s foreign exchange crisis was severe and negotiations with the IMF needed to be concluded quickly. And I heard he also issued a warning that if the situation wasn’t resolved promptly, Korea could face grave circumstances.”
“It sounds like polite advice, but the real message is a strong warning that the IMF delegation could withdraw if things don’t go their way.”
“That’s how I took it as well.”

Deputy Prime Minister Choi Jin-woo picked up the rocks glass that Seok-won had filled himself and took a sip of whiskey, his expression turning bitter.

“Even without President Davidson’s call, Japan is being shaken by Sanyo Securities’ bankruptcy on top of everything else. With the stock market collapsing and exchange rates soaring as a result, it would have been difficult to drag out the negotiations.”

He then looked at Seok-won, who was listening quietly, and spoke.

“Still, to conclude negotiations as favorably as possible, I’ve decided to accept the proposal you made.”

While there were no other options, it was a proposal that would benefit the Korean government without any losses, so I naturally expected it would be accepted.
Seok-won replied with a calm expression, showing no particular reaction.

“That’s good to hear.”
“However, I’d like to modify the transaction details somewhat.”
“How do you mean?”

Seok-won asked, narrowing his brow slightly.

“I’d like you to acquire three finance companies together with Ilhan Bank and Hansung Bank, the ones you wanted.”

Seok-won’s expression immediately hardened.
This was unavoidable because one of the biggest causes of the foreign exchange crisis was the massive short-term foreign debt that finance companies had recklessly borrowed.
For this reason, the IMF delegation had demanded the immediate closure of twelve finance companies, and they had essentially fallen into insolvency, so it wouldn’t be surprising if they went bankrupt tomorrow.
Being asked to take on three such finance companies was enough to make anyone’s expression harden.

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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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