Golden Spoon Investment Portfolio - Chapter 439

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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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439. How did you obtain such evidence?

Seok-won sat on the sofa of a penthouse located in central Tokyo, engaged in conversation with Porter, the branch manager.

“The yen exchange rate fell slightly today to 128.10 yen compared to the previous day.”

As Seok-won set down his teacup and spoke, Porter, seated on the sofa to his left, responded immediately.

“Under pressure from the Japanese Government, export companies including Sony and Toyota have been converting large amounts of dollars earned abroad into yen, which has driven down the exchange rate.”
“The fact that even export companies are moving suggests the Japanese Government is growing anxious about the yen’s continued decline since last year.”

Seok-won leaned back with one leg crossed.

“A weaker yen benefits export companies, but conversely, the stronger dollar raises import prices, creating adverse side effects, doesn’t it?”

Porter shrugged and continued.

“In a situation where the economic downturn from the bubble’s collapse is severe, a sharp rise in prices would be quite burdensome for the government.”
“Moreover, they’ve watched neighboring Asian countries, including Korea, suffer through a foreign exchange crisis. With financial institutions wavering due to bad debt problems and the exchange rate continuing to fall, they must be anxious about becoming the next target of attack.”

Porter nodded in agreement with Seok-won’s assessment.

“Having witnessed speculative capital brutally strip away their reserves, they’ll be frightened no matter how much foreign exchange reserves they’ve accumulated.”
“The problem is that while there are external factors, the yen’s decline is a structural phenomenon.”

At this, Porter leaned forward in his seat.

“Do you believe the yen will fall further from here?”
“Yes.”

Seok-won answered without hesitation, then explained his reasoning in a serious tone.

“What’s the surest way to prevent the economy from sinking into deeper recession?”
“Lowering interest rates and printing money to inject massive amounts of cash into the economy, wouldn’t you say?”
“Exactly. But when liquidity increases and yen supply grows, it becomes a cause for the exchange rate to fall.”

It was the same principle as when supply increases in the market, prices fall.

“Moreover, to save Japanese financial institutions facing a chain of bankruptcies due to non-performing loans, the government has no choice but to provide massive bailout financing.”

Seok-won continued with an unhurried demeanor.

“No matter how carefully we examine it, there are only factors that weaken the yen’s value, so it’s only natural that the exchange rate would soar.”
“I share that view. But the key question is how high the dollar-yen exchange rate will climb.”

Porter cautiously asked, stealing a glance at him.

“How high do you think the yen exchange rate will go?”

Since Seok-won had instructed him to use 6x leverage and short 3 billion dollars worth of yen since last month, the target exchange rate was crucial.
Seok-won, who had already thought this through, answered without hesitation.

“In the short term, 145 yen. By the end of this year, it will climb to 147 yen.”
“…!”

Porter’s eyes widened in surprise at a figure far higher than he had anticipated.

“One hundred forty-seven yen, you say?”
“That’s right.”

Unlike the composed Seok-won, Porter could not hide his bewilderment.
No matter how much of an economic powerhouse Japan was, such a dramatic spike in the exchange rate at once would deliver an enormous shock.
Porter reached for his teacup, struggling to regain his composure.
Then, startled by the heat of the hot water, he hastily set the cup back down.

“Are you alright?”
“Yes, of course.”

Porter answered, his face flushed from both bewilderment and the heat of the tea.
Then, concealing his embarrassment, he asked.

“So that’s a rise of 19 yen from the current level.”

Returning to the subject at hand, Seok-won nodded calmly.

“You’re aware that the Japanese Government injected 326.6 billion yen in public funds into the Long-Term Credit Bank of Japan and Yasuda Trust Bank, from which we acquired non-performing assets through bulk sales.”
“Of course.”
“Not just those two institutions—virtually all Japanese financial firms are facing crisis. To stabilize the situation, the scale of public funds being injected will grow exponentially, reaching at least several trillion yen.”

At the staggering sum, Porter unconsciously swallowed hard.

“When you consider liquidity flooding in all at once like that, it’s fortunate the yen hasn’t broken through 150.”
“…Now that you mention it, that’s true.”
“If the exchange rate spikes, the Japanese stock market won’t escape a crash either.”
“So that’s why you told me to take short positions on the Nikkei along with the yen last time.”
“Exactly.”

Seok-won nodded and held up two fingers.

“There are two companies we can acquire when the market collapses and the Japanese Government is preoccupied with cleaning up non-performing assets.”

Porter’s eyes gleamed as he straightened in his seat.

“Which companies are those?”
“Ajinomoto and Sumitomo Chemical.”

Porter tilted his head, studying him with a puzzled expression.

“Ajinomoto—isn’t that the company that manufactures artificial sweeteners?”
“That’s right.”

Originally it was a company called Suzuki Pharmaceutical, but their flagship product—MSG seasoning Ajinomoto—became so famous and popular that they completely rebranded.
The product spread throughout Asia, including Korea, and became widely used across the region.

“Though the artificial sweetener is what they’re known for, they also produce pharmaceuticals and semiconductor materials, so calling them a comprehensive chemical company would be more accurate.”
“Now that you mention it, Sumitomo Chemical also manufactures products used in semiconductor production.”
“They’re the company that produces photoresist—an essential material in semiconductor processing. It’s a photosensitive liquid that undergoes chemical changes when exposed to light, and it’s absolutely critical.”

Meanwhile, Ajinomoto developed and monopolized supply of a micro-insulating film called ABF, which minimizes interference in current flow between circuits.
Since it’s a core material that goes into every high-performance semiconductor, when the semiconductor super-cycle arrives, major companies line up to secure their products—they’re treated as what’s called a “super supplier.”
Even after hearing these explanations, Porter still wore a puzzled expression.

“Why the sudden interest in semiconductor parts and materials companies?”
“Because they’re cheap.”
“Pardon?”

Porter’s branch manager blinked in confusion, caught off guard by the response.
Even as parts and materials companies, both firms carried substantial valuations.

“The stock market has collapsed in the wake of the bubble burst, and with Japanese semiconductor firms losing ground, companies like these have seen their share prices plummet alongside them.”
“Ah, so that’s what you mean by cheap.”
“Whether Korea or Taiwan captures market share, semiconductor manufacturers still rely on components produced by Japanese parts and materials companies. That means current prices are clearly undervalued.”

Porter’s branch manager nodded in understanding.

“Now that you mention it, that’s absolutely right.”

The Japanese market crash had certainly depressed valuations, but as the digital age truly dawned, semiconductor demand would expand far beyond current levels.
When that happened, the value and worth of parts and materials companies supporting semiconductor production would inevitably skyrocket.

‘Beyond that, governments worldwide will treat semiconductors as national security assets, making foreign acquisitions extremely difficult.’

This was essentially the last window of opportunity to acquire critical semiconductor parts and materials companies.

“The share prices have fallen significantly from their peaks, but both companies still carry substantial valuations. How much equity should we secure?”

I dismissed my wandering thoughts and answered his question.

“Aim for controlling interest first, then accumulate as much equity as possible.”
“That will require considerable capital.”
“That’s fine. Besides, the Japan branch has more than enough funds for that.”

Porter’s branch manager smiled with ease at the observation.

“That’s certainly true.”

Between the profits from the CDS option contracts that had bled Japanese securities firms dry and successive successful bets, the Eldorado Fund’s Japan branch operated tens of billions of dollars in capital.
That gave us more than enough capacity to acquire companies the size of Ajinomoto and Sumitomo Chemical without drawing funds from headquarters.

“Then I’ll proceed with block deals with major shareholders holding significant stakes first, followed by accumulating shares through the market.”
“Do that.”

After that, the two of them engaged in a lengthy and profound discussion about the investment direction for the Japan branch going forward.

* * *

Two days later, at the Yeouido National Assembly Office Building.
Congressman Choi Bok-rak, dressed in a gray suit and carrying a leather briefcase in one hand, opened the door and stepped into his office.
The aides who had arrived early and were already working immediately rose from their seats and greeted him.

“Welcome, Congressman.”
“Good morning.”

Just then, a female staff member called out to him as he passed by.

“A package arrived for you, Congressman. I’ve placed it on your desk.”
“Got it. Oh, and could you bring me a morning coffee?”
“Of course.”

Congressman Choi Bok-rak passed through the area where his aides were stationed and entered the inner office, hanging his coat on the rack.
As he placed his briefcase on the desk, he saw the package box sitting there alongside other mail, just as the female staff member had mentioned.
When Congressman Choi Bok-rak casually checked the sender’s name, his expression stiffened slightly.
Though he was alone in the room, he glanced around before using a box cutter to slit open the sealed portion and opening the package.
Inside were a thick leather-bound diary and a document envelope.
When he opened the document envelope first, English-language documents emerged.
Congressman Choi Bok-rak, a former Securities Supervisory Authority official, immediately recognized them as bank transaction records from Switzerland and the Bahamas, along with accounting documents from the United States branch of Donghae Oil, and his eyes narrowed.
He hastily flipped open the diary as well, and his gaze fell upon sections meticulously organized with dates, names of high-ranking government and political figures, locations, and numbers.
It was none other than Chairman Woo Yong-gap of Donghae Group’s bribery ledger.
Since these were materials that could cause considerable upheaval if exposed, Congressman Choi Bok-rak unconsciously swallowed hard.
Knock, knock.
At the sound of a knock on the door, Congressman Choi Bok-rak hurriedly closed the diary in his hand.

“I’ve brought your coffee.”
“Ah, thank you.”

Congressman Choi Bok-rak spoke with an awkward expression as he watched the female staff member set the teacup on his desk.
The female staff member glanced at him with slight puzzlement, but soon paid it no great mind and bowed her head.

“Then I’ll excuse myself.”
“Yes, go ahead.”

Choi Bok-rak watched the female secretary leave, tense with anxiety, and only released a breath once the door closed behind her.

“Phew.”

He steadied his racing heart and pulled out his phone from his pocket, dialing a number.
Seok-won answered after the phone rang twice.

[It seems the package arrived safely, judging by your call.]
“Yes, that’s right.”

Choi Bok-rak gazed down at the parcel box on his desk, his eyes trembling with intensity.

“How did you obtain evidence like this?”
[It’s better if you don’t know too much. It could become problematic for both of us.]
“I see. My thinking was too shallow.”
[With this, we can certainly ensure Chairman Woo Yong-gap has no way to escape.]
“Of course. And we should be able to recover the funds he smuggled abroad as well.”
[Good. Then I’ll leave the rest to you, Assemblyman.]
“Yes.”

After ending the brief call, Choi Bok-rak took a deep breath as he gazed at the contents within the parcel box, then exhaled slowly.
As the deep breathing calmed his excitement, rationality returned to its proper place.

‘This is a tremendous opportunity.’

Choi Bok-rak had already once exposed how Chairman Woo Yong-gap had embezzled company funds on the brink of bankruptcy, causing stock prices to surge significantly.
If he detonated this second bombshell while revealing this, he could certainly etch his name into the minds of voters.

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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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