Golden Spoon Investment Portfolio - Chapter 520

—————
This chapter was translated by Lunox Novels. To support us and help keep this series going, visit our website: LunoxScans.com
—————

520. We should have at least one subsidiary under our belt.

The cat family, now completely part of our household, huddled together on the garden lawn, grooming one another and meowing contentedly.

“How do they get along so well?”

Jo Deok-rye held a teacup of black tea in her hand and spoke with an adoring expression.
Watching the cats play through the expansive glass windows of the living room, a satisfied smile naturally bloomed across my face.
Just then, Chairman Park Tae-hong, who had come home late after drinking heavily the previous night, opened the bedroom door and stepped out, prompting Jo Deok-rye to cast a sharp, scrutinizing glance at her husband in an instant.

“You’re finally awake?”
“Ugh… yeah.”

Chairman Park Tae-hong collapsed onto the leather sofa in the spacious living room, rubbing his stiff neck with one hand while frowning.

“My body’s in terrible shape because of the hangover.”
“You should have drunk more moderately.”
“Stop nagging and bring me some honey water.”
“Goodness. Fine.”

Jo Deok-rye turned her head toward the kitchen and raised her voice.

“Gunsan Housekeeper! Please prepare a glass of honey water for the Chairman!”
“Yes, ma’am.”

As the Gunsan Housekeeper, wearing an apron, answered from the kitchen, Jo Deok-rye removed the reading glasses she had been wearing and set them down.
Then, looking at her husband sitting on the opposite sofa, she spoke.

“What on earth were you drinking so much for?”
“Sigh. I ended up like this after talking about this and that with the textile executives who are retiring this time.”

Chairman Park Tae-hong rubbed his haggard face with his palm as he replied.

“You said Manager Choi and President No are retiring this time as well.”
“Yes.”

At her husband’s bitter expression, Jo Deok-rye spoke with a worried tone.

“Those who’ve worked with you for so long must be quite disappointed.”
“I offered to create positions for them at the headquarters or the newly acquired Korean Tongun, but they said they’re getting on in years and want to retire.”
“But aren’t both of them still around your age?”
“President No is the same age as me, and Manager Choi is a year older.”

Jo Deok-rye responded with a note of regret.

“Then isn’t it too early for them to step away from work?”
“The retirement is just an excuse. The real reason is they’re making room for the eldest.”
“What do you mean?”
“Starting next week, the eldest is being promoted to Vice Chairman.”
“Yes, but…”
“For now, he’ll manage the newly acquired discount store chain and logistics company, but eventually he’ll be leading the entire group. He’ll need loyal supporters around him, and if they continue occupying those positions, they’ll become obstacles.”

Jo Deok-rye, understanding the implication, nodded quietly.

“Just as the downstream current of the Yangtze pushes the upstream current aside, they’re stepping back naturally—it’s what’s best for the eldest and the group.”

The conversation naturally paused as the Gunsan Housekeeper brought in warm honey tea.

“They’re truly thoughtful people.”
“Indeed.”

Chairman Park lifted his teacup and took a sip of the honey tea before setting it down.
He leaned back against the plush sofa and spoke in a slightly subdued voice.

“I told Manager Gil to give them a generous severance package.”
“That was the right thing to do.”

Regardless of the eldest son’s situation, these were people who had devoted themselves to the group while assisting her husband for so long—it was only right to show them consideration.
Jo Deok-rye glanced at her husband, whose expression seemed troubled, and spoke with a firm tone.

“Did you see the morning paper today? There was an article about Daekwang Group entering a workout.”
“Yes.”

Chairman Park’s expression remained composed, as if he had already known.

“I knew Daekwang Group was struggling, but I never imagined it would come to this.”
“They should have stopped expanding and played it safe when the warning signs appeared, but their greed was too great.”

It was a futile thought in a situation where events had already unfolded, but when Hansei Group collapsed after breaking the unspoken rule of the business world known as “the great horse never dies.”
Or if not that, perhaps when the IMF foreign exchange crisis struck two years ago, had we stopped the octopus-like expansion like other groups and reduced debt while strengthening our fundamentals, the outcome might have been different.
But Yu Chun-seok’s choice was to borrow even greater debt and continue expanding the company’s size, and this was the result.

‘Perhaps, like a car with broken brakes, he couldn’t stop even if he wanted to, trapped by excessive debt.’

No matter how much of a major conglomerate ranked second in the business world, the astronomical debt exceeding 57 trillion won had long since surpassed what Daekwang Group could bear alone.
It was a structure where, like a pyramid scheme, the company had to continuously expand operations and draw in money, or it would simply collapse.
Jo Deok-rye carefully asked while observing her husband’s expression.

“Our group is fine, isn’t it?”
“Of course. We prepared in advance by heeding the second son’s advice before the foreign exchange crisis came, so there’s no problem at all.”

Chairman Park Tae-hong answered with confidence.
And to ease his wife’s worries, he deliberately added in a playful tone.

“Besides, we have a son who’s the richest man in the world—what’s there to worry about?”
“That’s true. I’m relieved.”

Jo Deok-rye rose from her seat with a reassured expression.

“When you wake up, you’ll definitely suffer from a hangover, so I’ve made dried anchovy soup. Come eat breakfast soon.”
“My stomach was already upset, so this is perfect.”

As his wife headed to the kitchen, Chairman Park Tae-hong, now alone, gazed at the large article about Daekwang Group’s workout spread across the newspaper on the table, his expression growing heavy.

* * *

In the heart of Myeongdong, standing beside the Utopia Department Store headquarters, there was an elegant neo-baroque building spanning basement level 1 through ground level 5.
It was the WB Bank Headquarters, constructed with pristine domestic granite that drew particular attention, and as the first domestic building to undergo international design competition and the first bank building with steel frame and reinforced concrete structure, it was also designated as a Seoul City Tangible Cultural Property.
After liberation, it had been continuously used as the Ilhan Bank headquarters, and following the merger with Hanseong Bank in the spirit of continuing historical value and tradition, it continued to serve as the headquarters of the newly born WB Bank.
In a heavy atmosphere with Seok-won in the center, key executives of WB Bank including President Go Young-il were seated around a long table in the conference room on the fifth floor, discussing the Daekwang Group issue following the declaration of workout.

“First, as Daekwang Group enters workout, it appears that considerable losses will be unavoidable.”

Seok-won, dressed in a perfectly fitted gray suit, looked toward President Go Young-il seated on his right and asked.

“Specifically, how much loss do you expect?”

Go Young-il, the bank president, responded in a clipped, rigid tone.

“First, the Daekwang Group loans that were classified as normal have now been reclassified as non-performing loans, which means we must immediately establish loan loss reserves according to Financial Supervisory Service standards.”
“If my memory serves, the reserve ratio for non-performing loans was 20%, correct?”
“That’s correct. Normally, we would only need to set aside 0.5% for normal loans and 2% when there’s a possibility of problems, but starting with the year-end settlement, new asset classification standards will be implemented that will significantly increase the ratio to 20%, so we must comply with the new criteria.”
“You mentioned our Daekwang Group loans totaled 2.9 trillion won, didn’t you?”
“Yes, that’s right.”
“So we need to set aside roughly 580 billion won as reserves.”

Go Young-il quickly continued.

“Under the chairman’s directive, we classified the Daekwang Group loans as non-performing rather than normal early on and already set aside loan loss reserves, so we don’t need to make any additional provisions.”
“That’s fortunate.”
“However, other banks will likely see most of the profits they posted in the first half wiped out by the sudden loan loss reserves, potentially swinging them into losses.”
“What was the total lending volume to Daekwang Group across the banking sector?”
“We estimate it at approximately 23 trillion won.”
“Applying 20% to that comes to 4.6 trillion won—that’s a complete catastrophe.”

This was precisely why bank stocks had plummeted immediately after the workout announcement.

“The problem is that loan loss reserves aren’t the only issue.”

Go Young-il glanced at Seok-won’s expression as he listened, then continued speaking.
Though Daekwang Group’s entry into workout wasn’t his fault, he couldn’t help but feel awkward about it.

“To resolve this crisis, the government will likely demand that creditor banks like us provide additional loans, debt forgiveness, interest rate deferrals, and debt-to-equity conversions.”
“That’s the easiest approach, so it’ll probably happen that way.”

Then Shin Seung-han, the vice president wearing gold-rimmed glasses with his hair neatly combed back, carefully interjected.

“Banks that received public funds will simply follow whatever the government orders since they’ll cover losses with tax money anyway. But for us, having to absorb everything with our own capital, the burden will be substantial.”
“I understand it’s a frustrating situation. But since what’s done is done, rather than lamenting, our priority should be developing countermeasures quickly to minimize damage.”

Then I turned my gaze toward Jang Jun-hyung, the executive director, and issued instructions.

“Since we’re not listed on the stock exchange, there’s no risk of our stock price falling, but depositors may become anxious due to this crisis. Release a press statement informing them that we’ve already set aside reserves to reassure them.”
“Understood.”

After hearing the response, Seok-won looked at Go Young-il.

“Tomorrow’s creditor consortium meeting regarding Daekwang Group’s restructuring—you mentioned it’s scheduled, correct?”
“Yes, sir.”
“At that meeting, I want us to minimize debt forgiveness and instead propose that we acquire Daekwang Group’s subsidiaries through debt-to-equity conversion using the credit we’ve extended.”

Go Young-il, the bank president, leaned forward with a startled expression and asked.

“You mean to acquire Daekwang Group’s subsidiaries?”

The other executives present widened their eyes in astonishment as Seok-won gave a small nod.

“Arrange for us to acquire Daekwang Securities, Diners Club Korea, and Daekwang Electromechanical Industries.”

Daekwang Electromechanical Industries was an automotive parts manufacturer established through a joint venture between Daekwang Group and American GM, producing over forty critical components including braking systems, steering mechanisms, drive systems, air conditioning units, exhaust purification systems, automatic temperature controls, airbags, and engine control systems.
Daekwang Securities, meanwhile, was the flagship subsidiary of Daekwang Group and the industry’s leading securities firm, having recorded 700 billion won in net profit during the first half despite the difficult circumstances.
Finally, Diners Club Korea held the Korean license for the American credit card company Diners Club and operated as a credit card company under Daekwang Group.
They were all solid, profitable companies, yet Go Young-il’s expression grew troubled.

“The government is also eager to minimize the shock from the Daekwang Group crisis by accelerating subsidiary sales and normalization, so debt-to-equity conversion and acquisition shouldn’t be particularly difficult. However, if we proceed that way, 2.8 trillion won will be tied up, which could significantly deteriorate the bank’s financial position.”

I dismissed his concerns outright.

“Once I secure management rights, I’ll repurchase the stakes we hold in Daekwang Securities and Electromechanical Industries, so there’s no need to worry. And if I additionally invest one billion dollars into the bank to increase capital, there shouldn’t be any significant problems.”
“Did you just say you’d inject an additional one billion dollars into the bank’s capital?”
“That’s right.”

Go Young-il stared at me with his mouth hanging open in a daze.
He’d momentarily lost for words upon hearing such an enormous sum offered so casually.
Go Young-il and all the executives present couldn’t hide their astonishment at my seemingly limitless financial capacity.

“For WB Bank to become South Korea’s premier comprehensive financial group, shouldn’t it have a credit card company as a subsidiary?”
“South Korea’s premier comprehensive financial group?”

Go Young-il murmured, repeating my words with wide eyes.

“That’s right. What, do you lack confidence?”
“No, that’s not it at all!”

Go Young-il swallowed hard and shook his head vigorously.

“Come to think of it, acquiring Diners Club Korea seems absolutely essential!”

At that, Jang Jun-hyung and the other executives raised their voices in agreement.

“You’re absolutely right!”
“With sufficient capital backing, this could be the perfect opportunity to acquire Daekwang Group’s crown jewel subsidiaries at a bargain price.”
“If a credit card company becomes an affiliated subsidiary, it would indeed be like adding that missing puzzle piece you mentioned.”
“I’m in favor as well!”

At the mention of becoming South Korea’s number one comprehensive financial group, everyone’s faces flushed with excitement as they rushed to voice their agreement, as if passion had ignited within them.
Watching this, Seok-won nodded with a smile playing at the corners of his mouth.

“Then, taking it that everyone agrees, let’s proceed with this plan.”
“Yes!”

Go Young-il and the executives answered with vigor, their faces flushed with enthusiasm.

—————
This chapter was translated by Lunox Novels. To support us and help keep this series going, visit our website: LunoxScans.com
—————