Golden Spoon Investment Portfolio - Chapter 407

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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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407. It’s like closing the barn door after the horse has bolted.

Kim Jae-jun, Chairman of the New Era National Conference, returned to Seoul after completing a ten-day campaign tour that began in Gyeongsang Province, passed through Jeolla Province and Chungcheong Province, and ended in Gyeonggi Province.
Visibly exhausted, he took the documents from Woo Chun-il, the Secretary-General, and examined them before his eyes widened in alarm.

“Is this really true?”

When he looked up, Woo Chun-il, seated on the sofa to his left, answered with a grave expression.

“Yes, sir. Foreign exchange reserves have fallen below ten billion dollars again, and the outflow of dollars continues unabated. At this rate, the nation will declare default before the presidential election.”

Kim Jae-jun, his throat parched, reached for the cup before him and gulped down the water, grinding his teeth in barely contained fury.

“What in the world have the Blue House and the government been doing while things deteriorated to this point!”

As Kim Jae-jun vented his anger, Woo Chun-il spoke.

“It appears the recent additional credit downgrades by international rating agencies and the failure of the Industrial Bank’s bond issuance have had severely negative effects. The instability in Japan’s financial situation has also been acting as a headwind accelerating the dollar outflow.”

He did not mention how the presidential candidates’ actions—writing memorandums of understanding while simultaneously calling for renegotiation with the International Monetary Fund and speaking out of both sides of their mouths—had also contributed significantly to worsening the situation.

“Hmm.”

Kim Jae-jun exhaled a low sound and spoke, crossing his arms.

“So what exactly are they asking me to do?”

Woo Chun-il leaned forward and spoke carefully.

“They’re asking you to retract your statement that you would renegotiate unfair clauses with the International Monetary Fund after taking office.”

Kim Jae-jun’s brow furrowed immediately.

“The disclosed terms already contain far more excessive conditions compared to Thailand and Mexico, which received bailouts earlier, and there are even clauses that seriously infringe on economic sovereignty. How can they expect me to simply overlook that!”

Kim Jae-jun, his voice sharp with indignation, continued speaking with a stern expression.

“If we had negotiated properly from the start, we wouldn’t be hearing such talk!”

Woo Chun-il, the Secretary-General, tried his best to persuade Kim Jae-chun, whose expression was contorted with anger, without further irritating him.

“You’re absolutely right. But if our foreign exchange reserves are depleted like this, won’t our already struggling economy collapse so severely that recovery becomes nearly impossible?”
“….”
“If that happens, the next administration may spend its entire term merely cleaning up the mess without accomplishing anything.”

Under normal circumstances, Kim Jae-chun would not have yielded his stubbornness so easily.
However, the IMF crisis had caused the ruling Democratic Justice Party’s approval ratings to plummet, and for the first time, the possibility of achieving a change in power had grown—his resolve wavered.

“I understand your desire to alleviate the people’s suffering, but we must first overcome the imminent crisis before us. There can be no future without surviving the present.”

After a moment of deliberation, Kim Jae-chun lifted his head and looked directly at Woo Chun-il, asking his question.

“Are you saying this is truly a dangerous situation—not just complaints to extract what you want?”

Woo Chun-il nodded with a grave expression.

“From my perspective, it certainly is. The economic experts who participated in the camp said the situation is so precarious that we may not even make it past year-end.”
“Indeed, with public sentiment already poor, there would be no reason to tell us something that offers no benefit if revealed—unless the situation truly is urgent.”

With no further room for doubt, Kim Jae-chun spoke with a reluctant expression.

“It’s unfortunate, but there’s no choice. Tell them I’ll withdraw my call for renegotiation. However, this must be a joint position with the other presidential candidates.”
“Of course.”

Woo Chun-il answered promptly, relief evident on his face.

“Then I’ll convey the candidate’s position to the Ministry of Finance and Economy.”
“Very well.”

Kim Jae-chun nodded and leaned back in his chair, exhaustion written across his features.
Then, a sudden recollection brought a bitter smile to his lips.

“When Chairman Park warned us about the foreign exchange crisis before, I thought he was being overly cautious. But it’s all come to pass exactly as he predicted.”
“Indeed, it has.”

Woo Chun-il, harboring similar thoughts, wore an expression of regret.

“If we had examined the situation more carefully and taken action back then, wouldn’t things be better than they are now? That’s what I regret.”
“I feel the same way.”

Kim Jae-chun, who had been leaning against the sofa cushion, opened his mouth again.

“The Eldorado Fund—the owner is Chairman Park, right? The one who acquired Hansung and Ilhan Bank this time?”
“That’s correct. And not only that, he purchased 9 billion dollars worth of foreign currency bonds, which opened up breathing room for the Ministry of Finance and Economy before the IMF negotiations.”
“Despite his youth, he’s achieved such remarkable success on his own. Truly an exceptional talent.”
“You’re absolutely right. This incident has made me reassess Chairman Park.”
“Now that his chances of election are high, everyone lines up to offer donations. But Chairman Park is the only one who stood by me consistently during the most difficult times.”

Kim Jae-chun stopped tapping the back of his hand and spoke quietly.

“After the election is over, I’ll arrange a gathering to express my gratitude.”
“I’ll see to it.”

* * *

[Ruling and Opposition Presidential Candidates Withdraw IMF Renegotiation Claims]
[Market Interest Rates Soar to 30% Annually, Companies Face Financing Crisis]
[National Credit Rating Downgrade Triggers Won Plunge, Dollar Approaches 1,700 Won]
[IMF Warns Korea Faces Minimum 2.4 Billion Dollar Shortfall Without Additional Foreign Currency by Year-End]
[External Debt Expected to Increase to 126.8 Billion Dollars Next Year]
[National Default Imminent Rumors Deepen Fear in Stock and Foreign Exchange Markets]

Seok-won, sitting at a spacious desk with a newspaper spread before him, clicked his tongue briefly upon reading the front-page article about the ruling and opposition presidential candidates withdrawing their IMF renegotiation claims.

“Tsk. It’s fortunate they reversed course even now, but the timing is far too late.”

The belated attempt to restore confidence came too little, too late.
Having written memoranda and then reversed their position like flipping a palm, Korea’s political circles had lost the trust not only of the IMF and other international financial institutions but also of investors.
As a result, foreign financial institutions that had lent money to Korea, even if they planned to invest again later, showed signs of withdrawing their funds until after the presidential election and political uncertainty was completely resolved, thereby reducing their risk.

“And conveniently, the dollars I secured by purchasing foreign currency bonds and the IMF support funds are flowing in, creating a perfect opportunity for them to pull out of Korea.”

As dollars flowed into the Bank of Korea, foreign financial institutions and investors withdrew them just as quickly, making the foreign exchange situation even worse than before the IMF bailout.
Seok-won set down the newspaper in his hand and spoke coldly.

“They’ve already destroyed all trust. Promising to comply with the IMF agreement now is like locking the barn door after the horse has bolted.”

At that moment, the vibration alert on the mobile phone sitting on the corner of the desk rang out.
Seok-won checked the number displayed on the screen and immediately answered the call.

[I’m here.]

It was Lee Chul-gyun’s characteristically heavy voice.

“What’s the matter?”
[Seonam Securities is reportedly filing for court receivership this afternoon and suspending operations.]
“…!”

The moment I heard this news, my face hardened like stone.
But I quickly regained my composure, leaning back in my chair as I spoke.

“After Shinra Securities went bankrupt, customer deposit withdrawals became severe, so it seems they finally couldn’t hold on any longer.”

Lee Chul-gyun asked with a slight note of puzzlement at my matter-of-fact tone.

[It seems you anticipated this would happen.]

I held the phone to my ear and answered as though it were obvious.

“After the rumors about deteriorating finances spread last time, and then the sale rumors broke, a bank run occurred and deposits are being withdrawn at 20 billion won per day, as you informed me.”
[That’s right.]
“No matter how much of an industry leader Seonam Securities is as the fourth-largest brokerage, it would be impossible to withstand such massive continuous withdrawals.”
[That’s true.]

They desperately sold off their securities holdings indiscriminately to secure payment funds, but even that had its limits.
Moreover, as banks imposed massive penalties on the finance company under suspension, market liquidity dried up completely, making even short-term borrowing impossible.

“The sale card they pulled out as a last resort ended up accelerating their bankruptcy instead.”

In fact, acquisition negotiations with a certain conglomerate were progressing rapidly, and there were even rumors that a sale announcement would come soon.
But after witnessing Shinra Securities’ bankruptcy, investors who had deposited funds there rushed to withdraw their deposits from Seonam Securities without hesitation, fearing they might not recover their money.
No matter how much Seonam Securities assured investors that their deposits would be returned, those gripped by panic couldn’t hear such reassurances.
I wore a bitter expression as I spoke.

“If Seonam Securities enters court receivership, Dongbuk Construction, its parent company, won’t be able to escape the impact either.”
[Given that they’ve been raising funds through Seonam Securities using loopholes like deposit collateral and promissory note guarantees up until recently, we can’t rule out the possibility of a chain of defaults.]
“I think so too.”

With the funding cut off, it was only a matter of time before Dongbuk Construction collapsed.

“Let me know right away if any additional information comes in.”
[Yes.]

Lee Chul-gyun hung up immediately after his brief reply.
Setting down his phone, Seok-won tapped his fingers lightly on the desk, murmuring in a subdued voice.

“The atmosphere is already bad enough, but if Seonam Securities gets a business suspension on top of that, the fallout will be quite significant.”

* * *

The next day.
News came through the media that Seonam Securities had suspended operations and filed for court receivership.
As dawn broke, customers who had rushed to the branch in panic saw the notice posted on the Trading Floor entrance and their faces went blank with despair.

[Notice Regarding Business Suspension
Due to deteriorating financial conditions, we are temporarily suspending Trading Floor operations to normalize management.
We deeply apologize to our valued customers who have trusted and transacted with Seonam Securities.
We have filed for court receivership regarding all debts except customer assets, and we assure you that the assets entrusted to us by our customers will be safely protected…]

“A business suspension out of nowhere? What is this supposed to mean!”

A man in a grimy work jacket shook the lowered metal shutter violently.
The middle-aged man in a necktie beside him pressed himself against the shutter with a desperate expression, shouting at the top of his lungs.

“I entrusted my entire life savings here—what happens to my money!”
“Oh no. Oh no!”

An elderly market vendor woman with white hair sat down on the ground and wept, her body shaking with sobs.

“How could you do this with money I worked so hard to save! You bastards—give me my money back!”

As the commotion grew louder, Seonam Securities employees who had come outside belatedly shouted toward the customers.

“Everyone! As stated in the notice, your customer deposits are safe, so there’s no need to worry!”
“Please calm down and listen to what I have to say!”
“Once we enter court receivership, we’ll resume operations again very soon!”

The employees did their desperate best to placate the customers, but it was all for naught.
Instead, the enraged customers grabbed the employees by the collar and pointed accusingly, erupting into heated confrontations.

“You told us the company would never close its doors, and now you’ve stabbed us in the back like this—what are we supposed to believe?”
“Forget everything else, just give me my money back!”
“Stop talking and at least give us a written guarantee for our principal!”

As voices grew louder and those trying to force their way in became entangled with employees attempting to block them, the situation spiraled into chaos—police were called and arrived at the scene in a major commotion.
The same pandemonium unfolded at the Yeouido Headquarters branch and all 82 Seonam Securities branches nationwide.

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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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