[078] A Gloomy New Year for Some
“You need to appreciate every penny if you want to save money. And who knows? Maybe someone like Jerry Yang from Yahoo will show up.”
It seemed like quite a few venture companies were knocking on Miracle’s door. My uncle’s hope for a repeat of the American IT boom in Korea was clear.
“Then just invest a little in places you feel drawn to, Uncle. You might at least make some pocket money.”
Come to think of it, no company worth investing in had really emerged yet. Most likely, founding members were huddled in some warehouse, surviving on instant noodles while feverishly developing their ideas.
The only ones that came to mind were Nexon’s “The Kingdom of the Winds,” which started last year, and NCSoft’s “Lineage,” which launched this spring.
If you don’t ride the venture wave and get out quickly, investing in other companies might just be a waste of money. What to do?
“Do-jun, don’t be mistaken.”
“Sorry?”
“Just because you’re meeting with political bigwigs and handling billions, even trillions of won, do you think you’re some kind of chaebol chairman?”
“Uncle.”
“Shut up and listen.”
In ten years, I’d never seen Oh Se-hyun like this.
His stern expression and the contempt in his eyes as he glared at me were unmistakable.
“Your grandfather, Chairman Jin, only manages billion-dollar businesses directly. He dines with political heavyweights and secures billion-won deals. That’s what chaebol chairmen do.”
That’s what I’m doing now. So why is he so angry?
“But they have thousands of workers earning their keep. With the money those workers bring in, they acquire steel mills and build factories in China.”
Ah, I think I understand what he’s getting at.
“Without workers, there’s no master. Without tenants, there’s no landlord. Without people, there’s no king. But you? You have no workers, no tenants, no people. All you have is some money. And you’re already pretending to be a chaebol chairman?”
Even if he hadn’t told me to shut up, I had nothing to say.
Who would have thought that a former worker like me would be pretending to be a chaebol in just ten years? Even without Oh Se-hyun’s sharp rebuke, I wanted to smack myself.
How did I become so arrogant?
“Pocket money? You could earn tens or hundreds of billions. Is that pocket money?”
“I’m sorry. I wasn’t thinking.”
Oh Se-hyun seemed momentarily taken aback by my quick apology but quickly composed himself.
“At least you catch on quickly. That’s good enough.”
With a slightly sheepish expression, Oh Se-hyun nodded.
“So, where should we invest?”
“Uh, maybe you should decide, Uncle…”
“No, I can set the direction, but your judgment and instincts for investment are better. Just tell me, is there anything that catches your eye?”
“Then let’s put 10 billion each into two online gaming companies, and you can decide the rest.”
“Games, huh…”
Oh Se-hyun pondered for a moment before speaking.
“Let’s just use 100 billion in total. Two places for games, as you suggested. I’ll diversify the rest, keeping each investment under 10 billion.”
“Sure. Even if just one hits, we’ll break even, right?”
“You heard it earlier. The next government plans to foster IT. Do you think only one will succeed?”
Oh Se-hyun’s bright smile was truly a sight to behold.
It’s a shame such a wonderful person plans to retire in five years.
I’ll make sure his retirement package is generous.
The winter of ‘97 was truly cold. It was the only winter when Christmas carols didn’t fill the streets.
With three days left in December, I donned a suit once more to fight the last battle of the year.
“Your business cards are ready. Make sure to take them.”
Meeting people without business cards seemed impossible.
After much deliberation, I decided to pose as an employee dispatched from Miracle’s U.S. headquarters—a young second-generation Korean-American managing the investment system.
This also served to imply that the current situation in Korea was dire enough for headquarters to send someone over.
Seeing the English name “Howard Jin” printed on the card brought back memories of flying to Texas to invest in Dell Computers eight years ago.
It felt as vivid as if it happened yesterday.
“Getting your first business card feels oddly satisfying, doesn’t it? Like you’ve finally grown up. Haha.”
“Does it? It does feel a bit strange.”
“Enjoy that feeling later. We need to get going. The creditors must be waiting impatiently.”
We headed to the meeting place where the main creditors of the Ajin Group awaited. Oh Se-hyun and I had put our heads together to plan for today.
The goal was to ruthlessly drive down the acquisition price.
Every penny counts, after all.
In a large conference room, senior executives from three banks and their staff greeted us with anxious expressions.
A poker face isn’t just needed when you have a good hand. You need to maintain it even when the stakes are drying up and you’ve got a bad hand.
But the creditor group, led by the banks, seemed ill-prepared for the gambling table.
Their expressions, tone, and actions betrayed their anxiety.
These were people who had always held the most important thing in the world—money—and were used to being treated with respect and authority in the comfort of their banks.
Having never faced such a harsh wind, they were shivering as if naked in the cold.
They seemed puzzled by my presence alongside the representative, but their interest quickly waned.
With Oh Se-hyun present, they wouldn’t care who I was.
“I heard the merger talks with Sunyang Motors are completely wrapped up. Shall we proceed with the acquisition process?”
They began pressing us the moment we sat down, directing all their urgency solely at Oh Se-hyun.
“We haven’t signed the agreement yet. Sunyang Group is still adjusting their shares.”
“When will that be completed?”
“Why are you asking us questions meant for Sunyang Group?”
Oh Se-hyun and I leisurely sipped our coffee, contemplating how much to charge for a coat to those shivering in the cold.
“Chairman Jin of Sunyang Group assured us that the agreement is finalized and only the procedures remain.”
“That’s not entirely true.”
As I quietly set down my coffee cup and spoke, their attention turned to me.
“Excuse me, but who might you be…?”
“Oh, he was urgently called in from our U.S. headquarters. He’s overseeing this merger and acquisition.”
With Oh Se-hyun elevating my status, the creditors seemed a bit surprised.
Don’t I look too young?
A couple of bank representatives discreetly handed me their business cards, curious about my position or rank.
They wanted to verify if I was qualified to be part of this meeting.
Only then did I hand out my business card, and upon seeing it, they seemed to accept it.
After all, in America, young people run Wall Street, don’t they?
I gave a slight bow to the creditors.
“Howard?”
The creditors repeated my name, exchanging glances.
“He’s a second-generation Korean-American, so he uses an English name. I hope you understand.”
“I see. Please continue.”
“Yes. The investment review team at headquarters is currently re-evaluating this acquisition.”
As soon as I threw out the bait, the expected reactions poured in.
“What? Re-evaluation?”
“Re-evaluation at this stage? What do you mean…!”
The creditors, visibly startled, turned their burning gaze toward Oh Se-hyun. Though I had cast the bait, they instinctively continued to focus on the president.
Banks have a rule: they don’t deal with the help.
“Exactly. I tried to dissuade them several times, but as you know, Americans follow the system and don’t always listen to the president.”
Oh Se-hyun shrugged and gestured toward me.
“Due to our company’s system, I have to be mindful of this guy. He holds the opinions of our Miracle’s American investors. So, please listen to what he has to say.”
On the stage Oh Se-hyun set, I began my performance.
“The initial scenario was this: Sunyang Group wanted Ajin Motors, but they spent all their money acquiring Hando Steel. That’s when Miracle stepped in. We planned to hold Ajin Group temporarily and sell it at a high price once Sunyang Group gathered funds. I’m sure you all guessed as much.”
The creditors wore uncomfortable expressions. Realizing Miracle’s goal was profit, they understood it wouldn’t be easy to get what they wanted.
“But… who could have predicted the foreign exchange crisis in Korea? The acquisition amount is 1.2 trillion won. When the exchange rate was 800 won, it was 1.5 billion dollars. Now, at 1,800 won, it’s only 670 million dollars. If it rises to 2,500 won? 480 million dollars!”
Mentioning the exchange rate, the creditors, with pale faces, began to speak in desperate tones.
“The IMF aid has started. 2 billion dollars have already come in, so it won’t rise to 2,500 won. It’ll drop below 2,000 won soon and stabilize…”
“They promised 55.5 billion dollars, but only 2 billion has arrived. With the government changing, they’ll likely renegotiate with the new administration. 50 billion dollars… there’s no telling when it’ll come. By next year, it might rise to 3,000 won.”
The creditors could no longer speak.
“But it’s almost 1998. You need to close your books for the year, and when you look at them, there won’t be any answers. When the new government takes over, they’ll likely start bank consolidations. To survive, the dollars Miracle holds need to enter the banks before the year ends, right?”
Export companies earn dollars, but import companies need them. Holding dollars now means all these companies will flock to you.
Foreign banks’ dollar payment demands are also piling up.
In such an economic crisis, the need for large banks always arises, and the next government will likely rush to consolidate based on this year’s performance.
“But from our perspective at Miracle, we’re worried about Korea. What if it doesn’t bounce back? What if the Korean economy falls to the level of Southeast Asia?”
“So, what exactly are you trying to say?”
“Even though we’re the ‘preferred bidder,’ we’re thinking of withdrawing.”
“What, what do you mean?”
“We’re pulling out. If we back out of acquiring Ajin Group, won’t Daehyun Group step in? Negotiate with them.”
Would Daehyun Group really step in? They’re already overwhelmed with their own issues.
“Please, don’t look at me like that. What can I do if the American investors, who hold the purse strings, are uneasy about Korea?”
Oh Se-hyun feigned discomfort under the scrutinizing gaze of the creditors.
Anyone sharp enough here would know what needs to be done.
Cash is drying up, and there’s a massive, unsellable inventory sitting there, causing headaches.
Whether it’s at half price or a clearance sale, getting rid of it quickly is the best strategy.
This simple principle applies to small shops, large corporations, and banks alike.
“Convince the American investors. Our country isn’t that fragile. In terms of economic scale and competitiveness…”
One of the bank executives spoke urgently, but I responded with a slight smirk.
“That’s exactly what the Korean government said right before the financial crisis hit, isn’t it?”
They fell silent. They probably didn’t have much else to say beyond the same old excuses.
At this point, Oh Se-hyun smoothly interjected, adding fuel to the fire.
“Isn’t it time for a decisive move?”
“What? What do you mean by decisive?”
With a smug look, Oh Se-hyun mimed a phone with his thumb and pinky, gesturing for a call.
“Call the bank presidents. They’re the ones who need to make the decision.”
Even executives are just employees. It’s time for the real decision-makers to step up.