New Employees With an Annual Salary of 1 Trillion Won - Chapter 143

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This chapter was translated by Lunox Team. To support us and help keep this series going, visit our website: LunoxScans.com
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Chapter 143. One Plus One (2)

The long-awaited year 2002 had begun.

The homes of high-ranking civil servants and politicians were bustling with visitors.

Financial Services Commission Chairman Im Yeong-geun’s home was also piled high with an enormous amount of gift bundles.

“I apologize for visiting you on the very first day of the new year.”

“Oh no, not at all. I’m grateful just that you came to pay your respects. But you’ve brought something like this again?”

“It’s nothing major, just a fountain pen that was used by the US President.”

It was a gift I had received through headquarters.

It was actually a fountain pen that President Bush had used, obtained through a charity auction event, so it even came with a certificate of authenticity.

“You’re giving me a very precious gift. I’ll only use it when making important signatures.”

“Since you’re known as an upright person who doesn’t accept bribes, Chairman, I prepared a gift with meaning rather than monetary value.”

“Haha, I’m not such a clean person either. If I were truly upright, wouldn’t I have refused the fountain pen as well?”

Despite saying this, the Financial Services Commission Chairman was quite honest.

The gifts piled up in his home weren’t expensive presents either, but all fruits and food items.

If he were truly materialistic, he would have received boxes filled with cash late at night instead of such gifts.

“But is there a particular reason you wanted to visit from the new year? I know the Tiger Fund Branch Manager isn’t someone who goes around paying new year’s greetings.”

“I apologize in advance for bringing up unpleasant topics from the new year.”

I bowed my head in apology first.

Seeing this, the Financial Services Commission Chairman sensed something serious and straightened his posture.

“What’s the matter?”

“Tiger Fund is conducting short selling against Korean companies.”

“That’s nothing special. Many funds on Wall Street conduct short selling against companies not just in Korea but worldwide, don’t they?”

Chairman Im spoke as if it were no big deal.

Short selling itself was certainly not a problem at all.

However, since the events that would unfold would put the Financial Services Commission in a difficult position, I apologized in advance.

“After discussions with many Tiger Fund experts, we decided on short selling targets and have already built large-scale short positions.”

“It wouldn’t be proper to ask about the stocks, would it? But I’m curious which stocks Tiger Fund has built short positions on.”

“What would I have to hide from you, Chairman? We’re conducting short selling on credit card company stocks.”

“Credit card companies… I received reports that large-scale short selling had entered the card industry overall, but I didn’t know it was Tiger Fund.”

The Financial Services Commission Chairman was in a position to receive a lot of information.

Especially after the IMF, foreign capital movements were mandatory reporting items, so he couldn’t have been unaware of credit card company short selling.

Of course, it was difficult to know exactly which fund did how much.

So there was a high possibility he truly didn’t know that Tiger Fund was short selling card companies.

“Since Tiger Fund Korea Branch acquired Hanseo Card, we could more accurately understand how insolvent Korean card companies are.”

“It seems you think all Korean card companies are insolvent.”

“That’s correct. They’re issuing cards without any screening standards and releasing money through virtually unlimited cash advance services.”

The Financial Services Commission Chairman also knew this fact.

After the IMF, the government had lifted credit card restrictions to stimulate domestic demand.

“Hmm, what’s the problem with that?”

“They’re unable to recover the money they released that way. As delinquency rates soar, card debt is becoming insolvent.”

“According to materials submitted by card companies, they said delinquency rates are sufficiently manageable.”

“We judge they’re intentionally hiding it. According to information investigated by Tiger Fund, the debt ratio is serious. Card debt has already far exceeded 80 trillion won, and among that, the scale of non-performing loans is estimated at over 10 trillion won.”

I took out materials and showed them to the Chairman.

The Chairman looked puzzled as he examined Tiger Fund’s report, which was quite different from the materials he had been briefed on.

“I don’t understand why card debt is listed as 80 trillion won. In the materials I was briefed on, the card debt issuance scale itself was only 20 trillion won. Isn’t this a report inflated by four times?”

“What’s visible on the surface is only 20 trillion won in card debt. But card companies are mobilizing everything including corporate bonds, CP, and even ABS. Adding all of that together, it has already exceeded 80 trillion won.”

All companies want to hide their debts.

Card companies too likely only reported card debt to financial authorities.

They would have tried not to reveal total debt including derivatives and borrowings by any means.

“Hmm, if debt reaches 80 trillion won as the Branch Manager says, the situation is indeed serious.”

“It won’t simply end with a few card companies collapsing. All citizens who use cards will take a direct hit.”

“Surely it won’t spread that far? Bank-affiliated card companies will be the responsibility of their parent banks, and other card companies are mostly affiliated with large corporations, so won’t they each handle it themselves?”

Both financial authorities and business circles had the same thinking.

Since banks and large corporations would ultimately take responsibility, it was fine to issue cards recklessly and release cash advance services virtually without limit.

That’s how the situation reached this point.

Thanks to that, Tiger Fund could feast on delicious prey.

“It’s absolutely not a scale that can be resolved independently. Bank-affiliated card companies might somehow endure, but large corporations can never fully shoulder card companies’ debt.”

“You seem to think large corporations will just abandon their card companies.”

“That’s right. And as time passes, debt will accumulate like a snowball. It must be brought to public attention as soon as possible.”

“Public attention seems too early.”

At the mention of public attention, the Chairman instinctively frowned.

With less than a year left until the presidential election, he seemed to want to avoid a major financial crisis at all costs.

“Only by bringing it to public attention right now can we deal with it. If even six months pass, the infection will spread into a tumor, making it difficult to stop even with major surgery – a financial crisis will strike.”

“Financial crisis… That expression is unpleasant to hear.”

“I don’t want to use those words either. But if we leave the card crisis as it is…, a second IMF could come again.”

I had touched South Korea’s reverse scale.

Especially for someone working as a bureaucrat in this administration, those three letters IMF were terrifying.

“Is it serious enough to mention the IMF? It seems you’re exaggerating too much.”

“It’s not an exaggeration. There are already talks of global credit rating agencies lowering Korean card companies’ ratings. I came from the new year to inform you, Chairman, before Wall Street moves first.”

It was absolutely not an exaggeration.

If card companies were left alone like this for just a few years, a situation similar to the IMF could come.

So the abscess had to be drained as soon as possible to reduce damage even a little.

“How much time is left? I can’t move based solely on Tiger Fund’s words. The Financial Services Commission must first assess the actual state of Korean card companies before we can act.”

“Time doesn’t seem abundant. Global credit rating agencies will move within two months at the latest.”

“Fine. I’ll begin assessing the actual situation starting tomorrow. I’ll also make an official report to the Blue House to respond strongly so card companies can’t hide non-performing loans.”

The Chairman was moving as I wanted.

That didn’t mean he completely trusted me.

“If the Branch Manager’s words differ greatly from the actual situation… you’ll need to be prepared.”

“I’ll stake my position if needed. I came to see you, Chairman, bearing losses solely for South Korea’s development. There’s no other reason.”

“Time will tell. If I misunderstood unnecessarily, I’ll apologize then.”

The Chairman’s expression hardened.

Having brought up the taboo word IMF, the atmosphere couldn’t be good.

Therefore, I had to leave the Chairman’s house as if being chased out, leaving only light greetings.

***

As the new year dawned, the entire country was swept up in World Cup fever.

Turning on TV brought floods of World Cup-related broadcasts and advertisements, and department stores and marts were filled with World Cup commemorative products.

While all citizens were waiting for the festival, only the Blue House and financial authorities were different.

Because the Financial Services Commission Chairman was making a direct report to the President about a financial bomb that could explode at any time.

“Chairman, is the report content true? Are you saying a financial crisis could come again because of credit cards?”

“That’s correct. As a result of precise investigation of all card companies, delinquency rates were much higher than reported figures, and the scale of card debt was at least three times more than known.”

The President’s face instantly hardened.

He had overcome the IMF and now just needed to hand over his position to a successor.

But if another financial crisis erupted in his final year in office, all achievements so far would become bubbles.

He had to prevent being recorded in history as someone who, like the previous president, dumped the burden of financial crisis on his successor.

“Isn’t there a way to handle this quietly?”

“This isn’t something that can be cured just by applying medicine. If we act now, treatment is somehow possible, but if more time is delayed, it will be difficult to fix even with major surgery.”

“You’re saying we need to burst the abscess now.”

The President fell into deep contemplation.

The Chief Secretary, who had been quietly listening until then, suddenly raised his voice.

“Why on earth are you bringing such a report now! With the presidential election right around the corner, saying we should publicize such a crisis is no different from saying we should hand over power to the opposition!”

“No. Rather, by stepping forward now, we can avoid giving the opposition party an opportunity. If this administration shows it can handle the situation well, approval ratings might actually rise.”

“How does that make any sense!”

The Chief Secretary’s voice grew increasingly loud.

Meanwhile, the President finished organizing his thoughts and calmed the Chief Secretary down.

“The Chairman is right. It’s better to let it explode now so we can create an opportunity.”

“But this would be like pouring cold water on a festive atmosphere. Won’t the people’s anger grow?”

“We just need to wrap it up before the World Cup starts. The World Cup fever can cover up everything!”

The Chairman urgently raised his voice.

He judged that once the World Cup began, whatever happened would soon be forgotten.

“Hmm… would it be possible to wrap this up before the World Cup?”

“It’s possible if the large corporations that control banks and card companies actively step forward. And to resolve it as quickly as possible, we have no choice but to make it widely known from the start.”

“You mean we need to create a sense of crisis to get the banks and large corporations moving.”

“The Financial Services Commission will impose strong sanctions. Then the card companies will get scared and come in with their heads bowed.”

The President nodded as if satisfied with the Chairman’s answer.

The decision to reveal rather than hide the crisis was by no means an easy one.

“The Chairman has made a difficult decision. You must have had many concerns on your own.”

“Actually, I didn’t know about it either. If Tiger Fund hadn’t informed us, I would have just left it alone until the pus turned into a tumor.”

“Tiger Fund helped?”

“That’s right. The Tiger Fund Korea Branch Manager came to see me directly and warned about the card company non-performing loans problem. He advised that the government should step forward first before foreign media and global credit rating agencies move, so we could lead the situation.”

The President recalled the face of the Tiger Fund Korea Branch Manager.

Though he was a young man barely past twenty, he possessed abilities that transcended his age and was already someone who had helped this administration greatly multiple times.

“Once this situation ends, we should formally invite the Branch Manager to the Blue House.”

“I would be honored if you could allow me to attend that occasion as well.”

“Of course we should. But before that, we need to resolve this situation as quickly as possible.”

“I will do my best to finish it before the World Cup starts.”

“I’ll mobilize all related ministries to provide support. If necessary, we’ll even call the banks and large corporations that control card companies to the Blue House.”

The Blue House began to move directly.

In Korean society, the Blue House’s power was still absolute, and no matter how massive the banks and large corporations were, they couldn’t go against its will.

Now the non-performing loans could no longer be hidden.

The banks and large corporations had to endure the pain of cutting out the tumor.

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