Golden Spoon Investment Portfolio - Chapter 431

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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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431. If we acquire them, there’s one thing we absolutely must do.

January 23, 1998, New York Plaza Hotel.
Seok-won, scheduled to return to Korea today, sat on the penthouse living room sofa with one leg crossed, dressed in a cashmere coat, waiting for the helicopter that would take him to the airport.
When he felt a vibration from his pocket, Seok-won pulled out his mobile phone, checked the number on the display, and answered the call.

“Hello.”
“Boss! Thank goodness. You haven’t departed yet, I see.”
“We said our goodbyes yesterday. What’s the matter?”
“Hong Kong Peregrine Securities just went bankrupt.”
“…!”

Seok-won’s eyes widened slightly, but he quickly regained his composure and spoke calmly.

“I heard HSBC, Deutsche Bank, and Citibank were providing emergency rescue funding of 100 million dollars. It seems that didn’t work out.”
“The plan to sell a 24% stake to the Zurich Group for 200 million dollars fell through, and with the situation in Indonesia deteriorating, they couldn’t recover the 260 million dollars in bonds that were tied up. They simply withdrew.”

Indonesia, like Korea, had received IMF bailout financing and was experiencing severe internal and external turmoil from harsh restructuring and austerity demands.

“They’re already burdened with over 400 million dollars in debt. Seeing another massive loss occur, they must have judged it hopeless.”
“There was probably also fear that undisclosed contingent losses might be hidden even deeper.”
“One wrong move and they’d be stepping into a quagmire, so that’s likely what happened.”

Seok-won nodded slightly while holding the phone to his ear.

‘Even after the warning, they didn’t clean up the Indonesian bad debts. They couldn’t overcome their greed in the end.’

Seok-won murmured inwardly, recalling the face of President Richard Lee, whom he had met in Hong Kong last time.
To liquidate the bonds, they would have had to accept substantial losses, so they hesitated and missed the timing.
In any case, spilled water couldn’t be recovered, so Seok-won cleared his thoughts and adjusted his grip on the phone in his hand.

“The largest investment bank in Hong Kong going bankrupt will certainly be a shock.”
“Right after the bankruptcy, Henry Wu, the Chief Executive, hastily announced that Hong Kong authorities would guarantee depositors’ funds in full, trying to prevent growing anxiety.”
“But that won’t easily quell the panic.”
“I share that sentiment.”

Seok-won tapped his knee rhythmically with one hand as he issued his instructions.

“The aftershocks will continue for a while. Monitor the situation closely and establish positions in U.S. and German government bonds.”
[You’re anticipating that market anxiety will intensify, driving investors toward safe-haven assets.]

Seok-won’s expression brightened at how quickly his counterpart grasped his intent without needing further explanation.

“Exactly. When fear runs this high, it’s human nature to move money into safe places.”
[I see. How large should we build the position?]

Seok-won paused briefly before answering.

“Start with a billion dollars and maximize the leverage.”
[A billion? But if we do that, the total volume will become astronomical.]

Landon Shore expressed his surprise.
When purchasing government bonds, one could deposit them with a bank, borrow funds to purchase more bonds, and use those as collateral to secure additional loans—a cycle that could repeat indefinitely.
At this point in time, leveraged investing was standard practice with virtually no regulatory restrictions, meaning a billion-dollar initial investment could balloon into hundreds of billions, even trillions in transaction volume.
Unlike Landon, who voiced his concerns, Seok-won dismissed them without hesitation.

“If government bond prices were to fall, that would be problematic. But right now, the likelihood of that is virtually nonexistent, so proceed as instructed.”

There was risk involved, but even Landon had to admit that for the foreseeable future, U.S. and German government bonds—being safe-haven assets—were far more likely to rise than fall. He quickly acquiesced.

[Understood. I’ll proceed as you’ve directed.]
“Others will be thinking the same way and moving accordingly, so secure the inventory quickly.”
[Yes.]

After ending the call, Seok-won lowered the phone from his ear and murmured softly to himself.

“Now it begins.”

The turmoil in international financial markets triggered by the Asian currency crisis would soon unleash an utterly unforeseen nuclear-grade shock that would shake the entire world.

“The helicopter has arrived.”

At the words of Han Ji-sung, his attendant secretary, Seok-won rose from the sofa.

“Then let’s depart.”

Passing through the entrance that Bockus, a sturdy bodyguard, held open, I left the penthouse and headed toward the helipad on the hotel rooftop with my entourage.

* * *

January 28, 1998, Hannam-dong Main House, Seoul.
The residence of Chairman Park Seok-won, enclosed by towering walls, bustled with people from the morning of Lunar New Year.
Cars driven by subsidiary company presidents and executives lined both sides of the street, extending beyond the alley and onto the outer road.
This year was particularly crowded, as executives from WB Bank, which I had acquired, had also come to the Hannam-dong Main House.

“Chairman, wishing you a prosperous new year!”

Go Young-il, who had transitioned from Daehung Securities to become the head of the newly established WB Bank, bowed deeply alongside six bank executives standing in line behind him, offering New Year’s greetings in unison.
Chairman Park Tae-hong, dressed in traditional Korean attire, welcomed those from WB Bank, unable to hide the corners of his mouth twitching upward in a smile.

“I hope all of you have only good things ahead this year.”
“Thank you.”

Bank President Go Young-il bowed his head even lower in response.
Then, along with his older brother, President Park Jin-hyung, he offered a respectful bow to me, standing on either side of Chairman Park Tae-hong.
Watching them lead their group away to make room for those behind them, Chairman Park Tae-hong’s face broke into a deeply satisfied smile.
Like the saying that the student surpasses the master, his gaze upon his second son—who had now far exceeded him and come to own the nation’s largest bank—shone with unmistakable pride.
As President Min Pil-gi and department store executives came forward next to offer their New Year’s greetings, Chairman Park Tae-hong offered each person kind words of blessing with a benevolent smile.

“Director Choi, I heard your son passed the Seoul National University entrance exam this year. Congratulations.”
“Thank you, Chairman.”
“President Min, make sure to take good care of your health. That’s how you can lead the company well.”
“Yes, I’ll keep that in mind.”

While receiving New Year’s greetings, the spacious living room, cleared of reception furniture, was laden with a long table overflowing with delicacies—steaming rice cake soup with colorful toppings and braised short ribs among them.
It was a gathering arranged so that subsidiary company presidents and executives who had offered their New Year’s greetings could sit at their assigned places and enjoy Lunar New Year food in a warm, harmonious atmosphere.
As the Gunsan Housekeeper and several assistants busily carried food between the kitchen and living room, the space filled with blessings and laughter exchanged among the guests.
While the entire nation was weathering the turbulent storm of the IMF crisis, the Daeheung Group, thanks to me, had stepped back from the brink of disaster and could laugh and celebrate with greater peace of mind.
As evening fell and everyone departed, Chairman Park Tae-hong sat on the study sofa, looked around at his two sons, and spoke with a satisfied expression.

“Both of you worked hard all day today.”
“You must have been tired dealing with people continuously since early morning.”

President Park Jin-hyung spoke with a concerned look in his eyes.

“I’m not so old that I’d tire at this level, so don’t worry.”

Chairman Park Tae-hong chuckled lightly and pulled a cigarette from the wooden box on the table, lighting it and placing it between his lips.
He inhaled the pristine smoke deeply, then exhaled slowly while turning his gaze toward his eldest son, President Park Jin-hyung.

“Since we’re all gathered here, tell Seok-won about it.”
“Yes, sir.”

President Park Jin-hyung shifted his posture and looked at his younger brother sitting across from him.

“You should know that Nasan Group defaulted while you were in the United States.”

Seok-won nodded slightly and acknowledged his words.

“They failed to pay 11.6 billion won across five banks and defaulted. I heard WB Bank lost about 30 billion won out of the 719.5 billion won in total bank credit.”

Seok-won looked at his father and brother with a puzzled expression.

“But why are you bringing up Nasan Group all of a sudden?”
“The Presidential Transition Committee has inquired whether we’d be willing to acquire Nasan Department Store.”
“Nasan Department Store?”

When Seok-won showed a slightly surprised expression, President Park Jin-hyung nodded with a serious gaze.

“Yes.”

Nasan Group, which specialized in fashion, construction, and distribution, was a conglomerate ranked 57th in the business world with 13 affiliated companies and annual sales of 1.3 trillion won.
However, it could not withstand the financial difficulties caused by reckless debt-driven management and defaulted just days before Lunar New Year.

“Since Chairman Um Seung-seop of Nasan Group is from Hampyeong in Jeollanam-do, they’ve conducted extensive business there. With this default, the economy of the Gwangju and Jeollanam-do regions is expected to suffer considerable damage.”
“The Kichang Automobile subsidiary in Jeollanam-do and the heavy industry plant in Yeongam have closed one after another, and with Nasan Group collapsing on top of an already difficult situation, it’s truly a case of misfortunes never coming singly.”
“Exactly. The four sections of the Gwangju Metro construction that Nasan Construction was overseeing have halted, and the large discount store that opened just four months ago will also close.”

Seok-won grasped the unfolding situation without difficulty and responded knowingly.

“For Kim Jae-chun, the president-elect with a political base in Jeolla Province, and the New Era National Conference, this must be quite a predicament ahead of the inauguration. So you’re asking us to take on Nasan Department Store?”
“Yes. Thanks to you, we’re in the best position among the major department stores in the market, so they’ve inquired whether we’d be interested in acquiring it.”
“That’s not really asking for our opinion—it’s practically a directive.”

Park Jin-hyung chuckled, his serious expression breaking into a wry smile.

“That said, the terms they’ve proposed aren’t unreasonable.”
“What kind of terms?”

Park Jin-hyung leaned forward, signaling the real discussion was about to begin.

“They’re offering to forgive half the debt and provide 70 billion won in acquisition funding through the Industrial Bank at favorable long-term rates.”
“If they’re wiping away the debt and lending acquisition capital on top of that, it’s certainly not a bad deal.”

I stroked my chin thoughtfully before responding.

“Your brother and I are inclined to accept the proposal. What do you think?”

Park Tae-hong held a cigarette between his fingers as he asked. I paused briefly to consider, then nodded.

“While the debt burden is substantial, Nasan Department Store itself generates steady revenue, so the acquisition seems worthwhile. More importantly, even excluding the Gwangju location, the real estate alone—the two branches in Gangnam and the one in Gwangmyeong, Gyeonggi Province—would be valuable investments.”

Then I turned to Park Tae-hong and added:

“Moreover, building a debt of gratitude with the President and the Ruling Party now will make it easier to acquire Korea Transport later.”

Park Tae-hong’s expression grew satisfied at my affirmative answer.

“Then let’s proceed with acquiring Nasan Department Store.”
“But there’s one essential thing we must do once the acquisition is complete.”
“What’s that?”

Park Tae-hong asked with a cigarette between his lips, and I answered with unmistakable gravity.

“We must close the Nonhyeon Branch and completely demolish the building.”

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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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