Chapter 286: The Den of Corruption, Sunyang Family 2
I gaped at Jin Tae-jun, who was practically pleading.
“Six hundred billion won?! Wow… Tae-jun, you’re loaded!”
“Are you mocking me? You’re the real rich one here. Why the surprise act?”
“I’m not rich enough to just lose six hundred billion like it’s nothing.”
“Hey! Stop rubbing it in!”
He shouted, clearly frustrated by my laughter.
“Have you tried asking Young-jun? If it’s Sunyang Electronics, they could probably pull six hundred billion from their secret funds.”
Jin Tae-jun shook his head vigorously.
“Are you crazy? You know what he’s like. He’d never help anyone. He’d just string me along, making me sweat.”
“Is that the real reason? Or are you just afraid that if you tell Young-jun, the news of your six hundred billion blunder will reach our second uncle?”
“Are you turning into Young-jun? Teasing me like you’re going to help but never actually doing it… Do you enjoy seeing me squirm?”
This was the limit of Jin Tae-jun’s patience. Despite the massive blunder, all he could muster was a brief plea for help. Expecting him to swallow his pride and persistently beg like an ordinary person was too much.
“Do you see me as family? Do you really think of me as your cousin?”
“What are you talking about?”
“Don’t pretend you don’t know. I’m always at odds with our second uncle over shares. We’re not exactly in a position to help each other out of genuine goodwill, are we?”
Jin Tae-jun’s face turned serious, losing his patience.
“Is it that urgent?”
He had to pay the money by the end of the month. He’d been delaying payments to suppliers or covering them with promissory notes. After months of stalling, he couldn’t push it any further.
If he delayed any longer, the news of the six hundred billion loss would spread like wildfire.
“There’s always Myeong-dong. With Sunyang’s credit, it shouldn’t be a problem, right?”
“That would immediately reach my father’s ears. Does that answer your question?”
I watched his serious expression for a moment before breaking into a smile.
“Six months. No interest, but stick to the deadline.”
Jin Tae-jun’s face lit up.
“Do-jun.”
“Forget it. Just buy me a meal sometime.”
I waved him off and picked up the phone.
“Vice President Jang, please prepare to withdraw six hundred billion won.”
As Jin Tae-jun let out a long sigh of relief, I turned to him.
“Prepare the promissory notes for Sunyang Construction.”
“Huh? Oh… right. You need a loan agreement, don’t you?”
“Isn’t that the best way to ensure the deadline is met? And isn’t it better for you too, Tae-jun? No risk of anyone finding out you dipped into company funds.”
His face flushed red.
“I forgot how sharp you are.”
“Don’t worry. I’ll keep it a secret. It’s not like we dislike each other enough to rat you out.”
I winked at him.
I even felt a bit of gratitude towards my cousin for gifting me a six hundred billion won bombshell.
As high school students began gathering for candlelight protests against U.S. beef imports, the 18th general election took place.
The opposition party, which had been lackluster until last year, unsurprisingly suffered a crushing defeat.
With a voter turnout of only 46.1%, it was the worst in national election history, but the ruling party and its supporters still managed to seize control of the legislature.
The true tsunami of the financial crisis hadn’t yet hit Korea, but as the nation became consumed by politics, the weaker regions began to falter first.
With their frail economies, even a slight tightening of bank credit was enough to topple them. And the void left behind was slowly devoured by large corporations.
“Human greed knows no bounds, does it?”
Returning from his first dinner with the new president and business leaders, Chairman Lee Hak-jae shook his head.
“Are you referring to Vice Chairman Jin Dong-gi?”
“Including him.”
“Didn’t enjoy the Blue House cuisine? You seem quite displeased. Haha.”
“They’re all clamoring to ease regulations so they can jump into local apartment construction.”
“Why the sudden interest? It’s not like regulations have stopped them before. Haven’t big company apartments already sprung up everywhere?”
“All the scenic and prime locations are greenbelt areas. If they lift those restrictions, it’s a goldmine. Land prices are dirt cheap, and the profit margins on apartments would be incomparable to the capital region.”
“So what did the Blue House say?”
“They’re actively considering it. They want to use it as a stimulus since the local economy is struggling…”
“That’s great news. Locals value apartment brands, don’t they? With names like Sunyang and Daehyeon, we won’t be outmatched anywhere.”
Chairman Lee caught the underlying meaning in my words and smiled slyly.
“You’re determined not to miss this opportunity, aren’t you?”
“It’s a once-in-a-lifetime chance. You’ve discussed it with our second uncle, right?”
He nodded.
“Yes. The completion of the Burj Dubai has elevated Sunyang Construction’s status above Daehyeon. It’s the tallest building in the world, after all. The stock price has soared. Jin Dong-gi doesn’t want to miss this chance either.”
“They want HW to handle the construction, right?”
“Exactly. The money from Dubai hasn’t come in yet, and they’ve poured everything they have into it. They can’t even dream of it, but the Blue House is pushing hard.”
“Sunyang Construction will eventually be mine, so let’s give them what they want.”
“Well, something interesting has come up. There’s no need to rush the decision.”
“Interesting?”
“Daehyeon made the same proposal.”
“What?”
I had forgotten. Daehyeon also went all-in on Dubai, and their financial situation is similar to Sunyang’s. The Daehyeon Group, too, is divided among several sons, each waiting for the chance to strike and seize control.
“If I had to choose between the two, it would be Daehyeon. If your prediction about Dubai’s downfall is correct, Daehyeon Construction will go bankrupt. They’ve sunk 2.8 trillion won into Dubai. How can they survive?”
“Why Daehyeon and not Sunyang?”
“It’s a cold corporate evaluation. Sunyang Construction isn’t quite on par with Daehyeon yet.”
“Then why not acquire both? It would create a mega-construction company. Unless managing it would be too overwhelming.”
Chairman Lee wasn’t particularly surprised. With a once-in-a-lifetime opportunity and plenty of cash on hand, acquiring a bankrupt company would be a piece of cake.
“Judging by your confidence, you must have made a lot of money in the U.S.?”
“I’ve made enough. Enough to acquire both construction companies.”
Chairman Lee’s eyes sharpened.
“I’ll start the review. If we acquire both companies and sell off or reorganize the overlapping parts, it should be manageable.”
“But can HW Construction handle all this? Aren’t we lacking in manpower and equipment?”
“There are plenty of companies willing to work under us if we pay them. Given the current construction market, we’re like rain in a drought.”
“If we could control the weather with money, it wouldn’t just be rain; it could be a downpour.”
We laughed as we discussed the aftermath of acquiring the two companies.
Meanwhile, two major American corporations on the brink of collapse were desperately pleading with Rachel Arieff, CEO of New York Miracle.
“Let’s face it. Collateralized debt obligations are worthless. Isn’t it common knowledge in this field that if the default rate exceeds 15%, it’s over? We’re past 60% and still plummeting.”
“I’m not denying it. I’m just asking for a little more time.”
“Sounds to me like you’re asking for time to liquidate the last of your assets and secure a hefty severance package. Am I wrong?”
The two lawyers representing Merrill Lynch and AIG Insurance hesitated at Rachel’s sharp rebuke, while the chief mortgage bond accountant from both companies stared off into the distance.
“Do I look like a fool? I’m aware that Merrill Lynch’s liabilities exceed 50 billion dollars. Our Miracle’s swap agreement is for 2.3 billion dollars. It’s obvious you can’t handle 50 billion, so do I look stupid enough to just watch you sink?”
“Rachel, to be honest, Merrill Lynch is currently negotiating with Bank of America. They’ll definitely acquire us. The greater the actual loss, the worse the negotiations. Miracle’s 2.3 billion dollars will be paid by Bank of America, not us.”
The Merrill Lynch lawyer spoke hastily, and Rachel snapped her fingers.
“Oh, right, I should hurry to collect the 1.9 billion dollars from Bank of America before they acquire a 50 billion dollar liability like Merrill Lynch. Definitely!”
As Rachel’s eyes narrowed, the men sighed again.
“I was willing to consider your situation and delay the swap claim. I also hope for minimal shockwaves. The fall of Wall Street isn’t good for Miracle either.”
Her somewhat hopeful words sparked a glimmer of expectation in their eyes. But her expression grew even sharper.
“Stan O’Neal retired officially yesterday, right?”
“Yes. We’re now under interim board management.”
The Merrill Lynch representative replied.
“How much was his severance?”
“What?”
“With a 50 billion dollar liability, he should have been fired, not retired! Isn’t that right? Yet he retired honorably and received severance, didn’t he?”
The representative turned mute again.
“He pocketed a whopping 160 million dollars as severance, didn’t he? With a 50 billion dollar liability, even if he returned his entire 45 million dollar annual salary from his tenure, it might not be enough for forgiveness. Yet he walks away with over three years’ worth of salary separately? What are you people doing? Engaging in such unethical practices and then asking me for leniency! Aren’t you ashamed?”
The CEO, who once earned an annual salary of 50 billion won, had created a staggering 50 trillion won in liabilities. Yet, he walked away with a severance package nearing 200 billion won, as if it were none of his concern.
“Do you realize that hundreds of families lost their homes, jobs, and even their retirement savings, all for a severance package of 160 million dollars?”
Her anger was directed squarely at AIG.
“And what about you? AIG is sitting on nearly 200 billion dollars in liabilities. Yet, Joseph Cassano isn’t fired; instead, he’s given the bizarre role of a consultant, doing nothing but collecting a paycheck?”
“Well, that’s because… Joseph Cassano resigned, taking responsibility for the situation, and until the very end…”
“Until the very end, he tried his best? Is that why he’s jetting off to his Bahama villa, collecting over a million dollars a month as a consultant?”
AIG’s liabilities were so massive that no company could afford to take them on.
Credit default swaps are a type of insurance, and AIG, being the world’s largest insurer, had entered into an enormous number of these contracts. No one was hit harder by the subprime mortgage crisis than AIG.
But the rule of “Too Big To Fail” would inevitably come into play. If 180 billion dollars in liabilities were to collapse, the consequences would be irreversible. Ultimately, the Bush administration’s final act would be to inject emergency bailout funds to revive AIG.
“I’ll stop here before I say something I’ll regret. Everyone, leave. And don’t forget: if our money isn’t in the account by the start of business tomorrow, we’ll proceed with the lawsuit immediately.”
The mention of a lawsuit made the men break out in a cold sweat.
Bank of America wasn’t foolish enough to acquire a company embroiled in litigation. The same went for AIG. If a lawsuit were underway, Congress would surely block any government bailout.
The representatives from both companies hurriedly left the room. They needed to secure the funds quickly to prevent Rachel from taking her next, relentless step.