Mid-December 1997.
In the conference room of a major merchant bank, just after futures and options expiry day, a silence heavier than that of a funeral hall had settled over everyone.
"Our dollars have dried up. We may not even meet the head office's reserve requirement."
The voice of the executive director in charge of funding was already cracking.
Merchant banks had once prided themselves on being the veins of South Korean finance.
Now they had been reduced to begging for a single dollar.
Before them, won-denominated promissory notes, scarcely better than wastepaper, lay in mountainous heaps.
Then it happened.
A man opened the heavy door and entered, breaking the silence.
"Good day. I am Joo Yun-ha, CEO of Rubicon Partners."
There was no trace of the W Securities branch manager who had bowed and scraped in the trading hall only days earlier.
He wore a fine Italian suit and sharp-looking glasses.
He looked every inch the representative of foreign capital, and my thoroughly obedient agent.
"Rubicon? I have never heard of it. What do you want?"
At the executive director's prickly response, Joo Yun-ha lifted the corners of his mouth slightly.
Instead of answering, he opened his leather bag and slid a document onto the table.
[Payment Guarantee: USD 5,000,000]
Five million dollars.
With the exchange rate approaching 2,000 won, it was an enormous sum worth roughly ten billion won.
"……!!"
The executive director's and the other executives' eyes widened as though they might burst.
Someone who could immediately mobilize five million dollars in cash in times like these.
It was no different from a downpour over land dying in a drought.
"There is no need for a lengthy discussion. I detest wasting time."
In a firm voice, Joo Yun-ha spoke the name of my prey.
"Jinsan Construction."
"……!"
"We will acquire all your first-priority mortgage liens and claims against Jinsan Construction through a privately negotiated contract."
"A-a privately negotiated contract? In principle, that must go through the court auction process……."
"Would you rather close your doors tomorrow morning while debating principles and procedure?"
Joo Yun-ha cut in and drove the point home.
"The external debt you have to cover tomorrow—how will you cover it without the cash dollars we are offering? Put your seal on this now, and we will transfer the dollars within an hour. Thirty percent of face value. I consider that quite generous in the non-performing loans (NPL) market."
Veins stood out on the back of the executive director's hand.
The humiliation of handing over valuable assets for next to nothing.
But there was no choice if the bank was to avert a default the following day.
"……Prepare the documents. I will sign."
It was capitalism's most miserable, yet most unequivocal, form of submission.
And so Jinsan Construction's heart—its prime Gangnam land and core equipment— passed completely into Rubicon Partners' hands for a mere five million dollars.
***
"What? Jinsan Construction has been sold?"
In Team 1 of Taeseong Group's Strategic Planning Office,
Department Head Park's sharp cry cut through the room.
The employees examining approval folders all looked up.
He adjusted his grip on the receiver as though unable to believe it.
"Rubicon? Some foreign private equity fund I've never heard of showed up with a bag of dollars?!"
His face flushed and darkened.
Jinsan Construction's Gangnam land was the crown jewel of this subcontractor restructuring operation.
The valuable cut of meat they should have swallowed first had been stolen by an unknown predator.
"The managing director and the directors are due here shortly. What a mess……."
Just then, the office door opened, and Managing Director Choi Tae-young, Director Choi Kang-min, and Director Choi Seo-yun came in.
Their expressions were complicated too.
"W-welcome!"
Department Head Park bowed hurriedly, while Choi Tae-young clicked his tongue and threw himself onto the sofa.
"Department Head Park, have you heard? Someone snatched Jinsan's mortgage liens."
Frowning, Choi Kang-min scanned the intelligence documents that had reached Strategic Planning.
"Rubicon Partners……. It seems to be a vulture fund out of Wall Street. It certainly has a supernatural nose for an opportunity. It must have exploited how desperate those merchant bank bastards are for dollars."
"What a waste. Those buildings and equipment would have been perfect."
Choi Seo-yun set down her bag irritably.
But the three siblings' disappointment did not last.
Department Head Park immediately presented another approval folder.
"The Jinsan matter is regrettable, of course, Managing Director, Directors. But the rest of the lineup is perfect. Twelve first-tier subcontractors, excluding Jinsan. Our 'Taeseong Asset Management' has just secured all their mortgage liens at a pittance."
After checking the documents, Choi Tae-young's face brightened again.
"Oh, really? Twelve?"
"Yes, sir. Losing Jinsan hurts, but in terms of the total volume, we have secured more than 90%. With these sites as collateral alone, the group's debt-to-equity ratio will fall well below the target early next year."
At the report, Choi Tae-young burst into hearty laughter.
"Haha! Yes, that's Strategic Planning for you. We can toss one company like Jinsan to the foreigners. We've taken all the other valuable ones! Isn't that right, Kang-min?"
Choi Kang-min adjusted his glasses, looking satisfied too.
After the managing director and the two directors left the office in good spirits,
Strategic Planning immediately grew festive, as though a victory had been announced.
Someone was already discussing the menu for that evening's company dinner, ready to pop the champagne.
I watched from a step removed.
I stood at the copier sorting documents, the picture of an utterly ordinary new employee.
'Enjoy every bite.'
I forced down the sneer threatening to form on my lips.
The sites belonging to the twelve companies they had so joyfully scooped up looked like sound assets on the books, but in reality they were a vast 'minefield,' tangled in possessory liens, with hazardous waste buried beneath them.
The golden goose that would produce real cash was already in my bag.
When would Taeseong's stomach turn after swallowing those hollow, poisoned apples?
I was already looking forward to the nauseated groans.
***
That night, I stood in a deserted public telephone booth in Yeouido.
As the coin dropped, Joo Yun-ha's breathless voice came through.
"C-CEO Baek! Everything is complete. All the first-priority claims against Jinsan Construction are now in Rubicon's name!"
"Good work, CEO Joo."
I adjusted my grip on the receiver and added flatly.
"And since you are the public-facing CEO, we should settle how you address me too. From now on, call me 'Chairman.'"
"Ch… Chairman? Understood, Chairman."
"It should go without saying, but my identity must remain an absolute secret. Until I step into the open, no one is to know I exist."
"Yes, I will remember. But about the Jinsan Construction matter I just reported……."
His voice trembled with wild excitement.
It was a natural response. He had swallowed valuable assets worth hundreds of billions of won for a mere five million dollars.
"Even if we simply proceed with liquidation, we can easily clear tens of billions in profit! For the time being, we should sell the assets and convert them to cash……."
"Who said we were finished?"
At that cold remark, the excitement on the other end of the line froze.
"Acquiring Jinsan Construction is not the end of the hunt. It is merely enormous 'bait' for the next one."
"Pardon? B-bait? Those enormous assets……."
"Discreetly contact the branch heads of foreign investment banks (IB) immediately."
I pushed in another coin and spoke coldly.
"They are jackals that have come to pick the Korean market clean at a pittance amid the IMF crisis. Put up Jinsan's Gangnam sites and equipment as collateral."
"Ah……! You want us to use that excellent collateral as leverage and borrow more dollars from them?!"
"Exactly. Right now, foreign banks will provide aggressive leverage as long as they have solid tangible collateral and cash margin. Put all the dollars remaining in my account into prime brokerage margin."
We had acquired the assets for a paltry 30% of face value.
But the underlying value of those prime sites in the heart of Gangnam ran into hundreds of billions of won. They were unquestionably sound assets.
If those enormous tangible assets and the remaining cash were used as a lever (Leverage) for foreign capital, magic would happen.
"One hundred million dollars. Draw down cash dollars up to that limit, the equivalent of two hundred billion won."
"O-one hundred million dollars……!"
Joo Yun-ha gasped in astonishment.
Having turned a hundred million won into nearly twenty billion in just a few days, I now intended to swell those assets to two hundred billion.
It was a mad gamble beyond even the imagination of a financier who had spent his entire career in Yeouido.
"With that ammunition loaded, I will tear the Taeseong Empire apart piece by piece. Make every preparation perfectly."
"T-Taeseong Group?! Chairman, the IMF crisis may have made it stumble slightly, but Taeseong Group is still South Korea's largest conglomerate! It is an enormous empire with dozens of affiliates. And aren't you a new employee in its Strategic Planning Office……?"
"I will explain the details when the opportunity arises. For now, let us focus on the instructions I have given you."
"……That declaration of a hunt you made before, that you would 'use vast capital to tear into an enormous empire until its breathing stopped.' The meaning of Rubicon Partners was never merely a metaphor."
Joo Yun-ha let out a trembling breath and steeled his resolve.
"Understood. As instructed, I will contact the foreign IB branch heads immediately and raise dollar leverage."
"Good. We will speak again when there is progress."
***
Several days later, at Taeseong Group headquarters, in the Strategic Planning Office, the champagne of delusion had not lasted even a week.
"What?! The land can't be transferred because possessory liens are being asserted?!"
Department Head Park's shout froze the air in the office.
His hand trembled like a leaf around the receiver.
"The books were clean! But now hired thugs are camped on the sites?! And illegal waste buried underground? What kind of bullshit is that?!"
The land of the twelve subcontractors that Taeseong Asset Management had celebrated acquiring for next to nothing.
At last, the rotten insides of those poisoned apples were beginning to spill out, one after another.
Militant union occupations over unpaid wages, astronomical hazardous waste disposal costs, and tangled equipment payment obligations.
Far from yielding cash, the sites were a vast minefield that could not even be touched legally without an immediate infusion of enormous funds.
"S-sir! We have a serious problem! The short-term bridge loan Taeseong Asset Management hurriedly took out to acquire the sites is due tomorrow, but the loans secured against the land have been blocked. We have no funds to repay it!"
It was a report bordering on a scream from Assistant Manager Lee, who was handling the work.
Department Head Park sank into his chair, his face drained of blood.
As the shell company's funds dried up, the true venomous fangs I had so carefully concealed struck with full force.
They took the form of the agreement for 'unlimited mutual payment guarantees' that the three siblings had so amicably signed.
It was a grotesque web of joint and several guarantees, putting their leashes in one another's hands with their siblings' crises as collateral.
The shit spewed out by Construction flowed ruthlessly back into Electronics and Retail, beginning to choke the entire empire.
They were rats caught in a perfect trap, forced to tear flesh from one another to survive.
The sound of the three siblings' flimsy alliance shattering filled the Strategic Planning Office.
As I gathered the warm A4 sheets emerging from the copier,
I watched the panicked office with an expressionless face.