CH133 | VOC

Knowing your enemy and knowing yourself ensures victory in one hundred battles. I immediately instructed Maru and Park Jong-bum to investigate Daehoo Group.

“90 trillion won in sales, 4 trillion won in net profit, 40 subsidiaries, 200,000 employees, and a market capitalization of 45 trillion won. Whew.”

As expected of a chaebol.

“They’re doing well.”

Even with the slight recovery of export businesses after the IMF crisis, Daehoo Group’s 4 trillion won in net profit stood out among the large corporations.

There were significant disparities even within the top 30 conglomerates.

The average sales of the lowest-ranked companies among the top 30 were only around 3 trillion won, less than Daehoo’s net profit.

Daehoo was a giant.

“Automobiles, construction, trade, textiles… they’re involved in everything,” Maru remarked.

I clicked my tongue. “What’s the point if it’s not profitable?”

I could have become a chaebol chairman long ago if I had wanted to acquire and manage a large corporation.

The market capitalization of the lower-ranked companies among the top 30 was only a few trillion won.

My personal assets, on the other hand, were officially 1 trillion won and unofficially 8 trillion won, making me the richest man in Korea.

I hadn’t bothered acquiring a large corporation because it was too inefficient.

Even if I acquired a company, it would take a long time to gain control and understand its complex businesses and operations.

And the profit margins of their businesses were pathetic compared to mine.

Even my department store, with the lowest profit margin, generated at least 10%, and sometimes even doubled or tripled its investment.

But those large corporations were obsessed with growth, not profit.

Their net profit margins were a measly 2-3%, sometimes even negative. Why bother with such businesses?

Complex ownership structures, demanding shareholders, low profit margins, and high employee salaries…

Park Jong-bum said, responding to my skepticism, “But they have influence. Power. All that comes with size. There’s a reason for the saying ‘too big to fail.'”

“That’s true. We’re just a junkyard compared to them. This is infuriating.”

I fumed. “They’re looking down on us, aren’t they? That’s why they’re doing this.”

I was proud of Chunha Trading’s strong foundation, but we had been operating discreetly because of the nature of our business.

“This is infuriating.”

Park Jong-bum, who had been going through some documents, suddenly said, “Sir, take a look at this.”

“What is it?”

It was a newspaper article. “Daehoo Group facing a liquidity crisis?”

I said indifferently, “It’s not like Daehoo is the only one facing a crisis. It’s a common news story these days.”

Even Saseong and Yeon-dae were facing rumors of crisis and restructuring. This was nothing.

But Park Jong-bum said with a gleam in his eye, “Read the article, sir.”

I scanned the article, and a phrase caught my attention. “Rapid increase in short-term debt ratio? Oh? This is interesting…”

No company preferred short-term debt with its high interest rates and short repayment periods.

Hanho Savings Bank had been able to control the large corporations precisely because of their desperate need for short-term loans.

“An increasing short-term debt ratio means financial institutions are hesitant to lend long-term. They’re offering short-term loans to test the waters. It’s not a normal situation for a company with 4 trillion won in net profit.”

I licked my lips. “Something’s fishy.”

This was different from Saseong, which was also facing rumors of a crisis.

Those were just speculations based on various indicators, but the increase in short-term debt ratio was a tangible sign of trouble.

My eyes gleamed. “We need to investigate this.”

* * *

“What’s wrong, Director Ahn?” Kim Yoon-seok, CEO of Daehoo Electronics, asked.

Ahn Ja-chul, holding a complaint against Chunha Electronics, said with a troubled expression,

“I still think this is too much…”

“Too much? What’s wrong with it?”

“Well…”

“If Kim Yong-tae hadn’t worked for us, would he even have dreamed of starting a mobile phone business? He learned everything at our research lab. He should be working for us, not against us. Don’t you think it’s strange that he would betray us like that?”

“I heard he developed the Edge Phone independently after leaving the company.”

Kim Yoon-seok said with a frustrated expression, “How do you know that’s true? Maybe he developed it while working at our research lab and then left to start his own company. Don’t you think that’s possible?”

“…”

He glared at the silent Ahn Ja-chul.

“Stop whining and get out. Your contract is almost over, isn’t it? You know the company’s situation. If you keep this up, you’ll be fired. Understand?”

Ahn Ja-chul lowered his head. “Yes, sir.”

After he left, Kim Yoon-seok frowned. “That bastard, causing me so much trouble over a trivial matter. It’s not like it’s his first time. That idiot, how did he even become a director?”

He glared at the door and then asked his secretary, “What did they say in the US?”

“They said immediate payment is difficult.”

Kim Yoon-seok shouted angrily, “They bought the products, they have to pay! How long are they going to keep delaying the payment?!”

Daehoo Group was facing the same problem as many subcontractors: producing goods without being able to sell them and accumulating debt.

They were producing more than the market demanded, so their overseas branches were forced to sell at a loss and accept unfavorable payment terms, creating a vicious cycle.

“Get them to pay! Even if you have to beg them!”

“Yes, sir. But sir…”

“What now?!”

“Hanho Savings Bank sent us another short-term loan proposal. What should we do?”

“Hanho Savings Bank? Kim Min-sik?”

“Yes.”

Kim Yoon-seok hesitated and then said with a troubled expression, “How much?”

“They’re offering a 200 billion won unsecured loan and a 500 billion won secured loan.”

“Ugh.”

Kim Min-sik’s short-term loan scheme, using miscellaneous assets as collateral, was infamous.

He had shaken the foundations of the chaebols and even brought down Daemun Group.

Kim Yoon-seok didn’t want to deal with him, but Daehoo’s financial situation was dire.

“No one has ever benefited from dealing with Kim Min-sik…”

Everyone knew he was a madman, but he had access to trillions of won in funds.

Kim Yoon-seok didn’t trust him, but in these times of cash shortage, a wealthy friend was always welcome.

He said reluctantly, “Arrange a meeting with him.”

* * *

“Look at this…” Kim Min-sik said, his eyes gleaming. “They’re taking the bait.”

He had received a call from Baek In-hwi yesterday, asking him to test the waters with Daehoo Group.

Even the top four chaebols had refused his short-term loans last year.

But now, Daehoo was responding immediately.

Their situation must have changed drastically.

“What should we do?” his secretary asked.

Kim Min-sik smiled. “Send them a revised proposal.”

“What?”

“Lower the amounts. Offer them a 150 billion won unsecured loan and a 400 billion won secured loan.”

His secretary said, sweating nervously, “A-are you sure, sir?”

Lowering the offer after they had expressed interest was a breach of etiquette, even in the cutthroat world of capitalism.

But Kim Min-sik just shrugged. “Of course. And if they accept, we’ll lower it again to 100 billion won and 300 billion won.”

“…They won’t be happy.”

They would be furious, but his secretary had mustered all his courage just to offer this mild advice. Kim Min-sik was a tyrant.

He chuckled. “What can they do? The lender sets the terms.”

“And if they accept that too?”

“We’ll lower it again to 50 billion won and 200 billion won.”

He said to his sweating secretary, “Didn’t you know I’m crazy? That’s what I do.”

* * *

“This confirms it,” I said to Maru and Park Jong-bum after hearing Kim Min-sik’s report. “Daehoo is in trouble.”

Daehoo had responded to Kim Min-sik’s ridiculous offers twice before exploding on the third attempt. But the fact that they had responded at all was significant.

Their willingness to borrow from Hanho Savings Bank was a clear indication of their desperation.

“Are they running out of money?”

Daehoo, which had seemed so invincible, now looked like a wounded dinosaur, on the verge of collapse.

“I have a feeling… a feeling.”

I hadn’t found any concrete evidence yet, but my intuition was tingling.

Prey had appeared.

“Hehehe, those Daehoo bastards must have underestimated me.”

I said to Park Jong-bum, “Keep a close eye on Daehoo’s every move.”

“Yes, sir.”

I turned to Maru. “How much cash can we mobilize?”

He calculated for a moment. “About 2.5 trillion won, if we limit it to Chunha Trading.”

It was a substantial amount for a mid-sized company, but it didn’t feel like enough.

“It’s not enough. We need more.”

“More? But if we withdraw more, it’ll disrupt our operations… What are you planning to do?”

“I always thought the chaebols’ business model was inefficient. But I’ve realized that we also need size. Enough size to deter them from messing with us.”

I smirked. “Let’s go hunting.”