CH125 | Heir

By mid-June, a month had passed.

During that time, I had been reviewing the employee roster.

As the number-one conglomerate in the industry, it was only natural that the number of employees was enormous. Simply reorganizing the structure took up all my time.

While I was immersed in this work, the president of Taewoo Telecom, Lee Joo-young, came to my office with exciting news.

"Vice Chairman! The new release of Diablo II by Blizzard has been an absolute hit!"

"That must mean Taewoo Telecom’s market share has increased again."

"Since we hold the exclusive distribution rights for Diablo II in Korea, our share has seen a slight uptick."

Following StarCraft, Diablo II had also been a home run.

Thanks to Blizzard’s back-to-back successes, Taewoo Telecom and its gaming platform reaped significant benefits.

"That’s great news. I heard we also did quite well with the StarCraft tournament. How’s that going?"

"At this point, you could say there's no young person in Korea who doesn’t know about Taewoo Telecom. Our professional gaming team, Taewoo Gaming, has built a massive fan base. The number of registered fan club members alone exceeds 500,000."

Taewoo Gaming was a massive success.

Compared to sponsoring traditional sports teams, the investment was much lower, but the marketing impact was several times greater.

"I assume the gap between us and KS Telecom has widened quite a bit?"

"We’re ahead by 15%. Other telecom companies are trying to catch up by launching their own internet TV and online education services, but since we secured the market first, their efforts haven’t been very effective."

Taewoo Electronics had seen tremendous success with its internet TV services.

Naturally, other companies rushed to launch their own versions, but they couldn't close the gap—we had the unbeatable advantage of our exclusive OTT platform.

The same applied to online education.

We had signed contracts with all the top instructors, making it nearly impossible for competitors to catch up.

"Maintain the course. Even if our market share dips slightly, don’t let it make you anxious."

"Is that really okay? If we want to solidify our position at the top, shouldn't we be willing to take on more losses?"

I shook my head with a smile.

In a few months, the iPhone would launch—our market share would rise naturally.

The real problem was stock price stabilization.

Due to the IT bubble, the stock prices of Taewoo Electronics and several other subsidiaries were plummeting.

But seen from another perspective, this was an opportunity.

A chance to acquire Taewoo Group stocks at rock-bottom prices.

Taewoo Group consisted of multiple subsidiaries.

But in the end, they all followed the directives of the headquarters.

More precisely, they followed my grandfather’s will.

And my grandfather placed the greatest trust in Park Man-deok, the president of Taewoo Securities.

That’s why I called President Park to my office.

His influence was crucial in preventing Taewoo Group’s stock prices from collapsing under the IT bubble.

"Congratulations once again on your appointment as Vice Chairman. I wanted to greet you formally during the executive meeting, but with so many eyes on us, I couldn’t do so properly."

"There’s no need for excessive formalities between us, is there?"

"Thank you for saying that."

Park’s lips curled into a broad smile.

Smiling while Taewoo Group’s subsidiaries were struggling?

It was possible only because Taewoo Securities, unlike the others, wasn’t facing any difficulties.

"The first half of the year is almost over. How’s the reaction to the Patriot Fund?"

"Thanks to you, we survived. I never expected the IT bubble to hit this quickly. At the beginning of the year, clients were in an uproar, demanding IT investments. But now, they’re calling to thank us."

Among all the securities firms managing investment funds, only Taewoo Securities had refrained from investing in IT stocks.

"I assume the returns on IT sector funds are catastrophic?"

"Not a single fund launched by other securities firms is showing positive returns."

"So, they all got caught in the IT trap."

"The firms with the least losses are down 15%, while many have lost over half their value. Hyundai Securities' fund, for instance, has plunged 70%. Meanwhile, Taewoo Securities’ fund is up 7%. Imagine how thrilled our clients are!"

Taewoo Securities’ return was just 7%.

Compared to bank deposit interest rates, it wasn’t a huge difference.

But when measured against other funds, the contrast was staggering—ranging from a minimum 20% to a maximum 80% gap.

"I assume most of the clients who left earlier this year have returned?"

"One client even came to our office in tears. He sobbed uncontrollably, apologizing for not trusting Taewoo Securities."

"This crisis must have strengthened customer loyalty."

"The number of clients who say they’ll trust only Taewoo Securities has skyrocketed. Even though our fund had the lowest returns at launch, the inflow of capital has surged."

That explained why Park was in such high spirits.

The more money flowed into the fund, the more fees Taewoo Securities could collect. And that success would further boost Park’s career.

"The IT bubble isn’t over yet. Stock prices will continue to decline."

"Then we should stick to safe investments like bonds for now."

"That’s fine for the funds, but we also need to protect Taewoo Group’s stock price, don’t we?"

"By protection… are you considering share buybacks?"

"Not just for shareholder interests—this is also a golden opportunity to repurchase our own stock at a bargain price."

"Each subsidiary has varying surplus funds, but we should have enough to cushion the decline. However, if we use those funds for share buybacks, we’ll lack capital for new business investments."

Stock buybacks were always good news for shareholders.

Since they reduced the number of available shares in the market, stock prices naturally increased, raising the value of existing shareholders' holdings.

But from a company's perspective, the situation was different.

Unless the buyback was for defense against a hostile takeover, using surplus funds solely to prop up the stock price was not an attractive option.

"Isn't this the perfect opportunity to promote Taewoo Group as a company that prioritizes its shareholders? If we buy back just enough shares to stabilize the stock price, it won’t require a significant amount."

"I’ll need to discuss it with the securities executives and the economic research team, but a share buyback doesn’t seem like a bad strategy."

Park had fully become my ally.

Taewoo Securities' fund had survived the IT bubble, strengthening his loyalty to me.

That’s why, whenever I made a suggestion, his first instinct was to nod in agreement.

"Oh! May I also recommend a stock? Apple’s new product seems quite significant."

"I’ll add Apple to the investment portfolio for the Patriot Fund. I’ll also devise a method to invest indirectly to avoid any regulatory issues."

Park was indeed a capable man.

Taewoo Group was one of Apple’s major shareholders. Naturally, if we used our insider knowledge of their upcoming product to buy stock, it could lead to insider trading issues.

That’s why Park had immediately proposed an indirect investment approach.

"That could be tricky. Are you confident?"

"Apple’s stock has already been cut in half due to the IT bubble. There are certain strategies that are only feasible in situations like this."

"That’s why I trust you, President Park. And as for Apple’s stock, make sure Taewoo Securities holds onto it—never sell it."

"How could I easily sell a stock recommended by you, Vice Chairman? If that situation ever arises, I will report it to you first without fail."

Taewoo Securities had maintained its position as the industry leader for several years.

And now, due to the IT bubble, the gap between first and second place was widening even further.

* * *

The heat of summer had begun to set in.

On a day like this, I would have preferred to stay in an air-conditioned office.

However, I had to step outside because Chairman Jang Kyung-joon of Hyundai Motors had urgently requested a meeting.

"My congratulations are a bit late, but I sincerely congratulate you on becoming Vice Chairman."

"Thank you. It’s an even greater honor to receive your congratulations, Chairman."

Pleasantries first.

But after just a few exchanges, Chairman Jang quickly started voicing his concerns.

"Have you heard the news? That rascal Young-joon is leading a herd of cattle across the border to North Korea."

"That just shows how desperate he is, doesn’t it? He claims to be honoring Chairman Jang Young-joo’s legacy, but in the end, it’s just an attempt to curry favor with the government."

"The year is already coming to an end. You haven’t forgotten our agreement, have you?"

Such impatience.

Instead of saying the year was almost over, he should have been thinking about how much time was still left.

"Of course, I remember. And there’s not much time left now. You’re well aware of Hyundai Construction’s dire situation, aren’t you?"

"I’ve heard that they’re struggling just to keep things afloat."

"They’re running out of money to juggle their debts. The fund launched by Hyundai Securities has plummeted to -77%. Once Hyundai Securities starts to collapse, where do you think they’ll get the money from?"

In most cases,

Even if a fund’s returns took a hit, the securities firm itself wouldn’t suffer major losses.

After all, it was the investors’ money that was losing value, not the firm’s.

But this time was different.

Taewoo Securities had made a fortune by launching a principal-guaranteed fund.

Seeing our success, Hyundai Securities, a latecomer, rushed to follow suit and launched its own principal-guaranteed fund.

And then—Boom!

The IT bubble burst, and Hyundai Securities suffered massive losses.

"Hearing you say that puts me at ease, even if just a little."

"Hyundai Construction is highly likely to default on its first round of promissory notes due on the next payment date."

"If we’re talking about the next payment date… that would be mid-October, right?"

Though he was now the chairman of Hyundai Motors,

Just a year ago, Jang Kyung-joon had been the co-chairman of Hyunjae Group.

That’s why he still had Hyundai Construction’s promissory note deadlines committed to memory.

"Hyundai Construction won’t have the funds to cover the notes due in October."

"From what I know, the total amount is only 20 billion won. Are they really unable to secure that much?"

"If Hyundai Construction were the only one struggling, they might be able to manage it. But with Hyundai Securities and Hyundai Electronics also on the brink, raising funds will be extremely difficult."

In truth, there was another reason.

The media hadn’t caught wind of it yet,

But Hyundai Construction had been concealing an enormous amount of outstanding receivables.

They were owed over 1 trillion won from Iraq alone,

And when combined with other unpaid amounts, they were hiding more than 2 trillion won in losses.

"So the moment is nearly upon us, then."

"All you need to do is steadily prepare for the acquisition of Hyundai Construction. I’m fully prepared to support you from my end."

"That’s incredibly reassuring! If I can successfully acquire Hyundai Construction, I’ll give my full backing to Taewoo Group’s acquisition of Hyundai Semiconductor!"

For the first time, Chairman Jang Kyung-jun smiled.

And I, too, couldn’t help but smile.

The moment my grandfather had long wished for—the acquisition of a semiconductor company—was now just around the corner.