Money Keeps Piling Up No Matter How Much I Spend

Translator: Dreamscribe

A market capitalization of 20 trillion won.

That figure only includes listed companies, and if unlisted ones are included, the scale becomes even larger.

LK Group owns the number one hotel subsidiary in South Korea and was making a lot of money through its distribution businesses such as department stores and duty-free shops.

In particular, its main business, LK Hotel, was not a listed company.

"LK Group did have some noise during the succession process. But it didn’t create any significant problems. Contrary to concerns, the second son, Oh Jae-hyun, accepted the succession process without resistance. It looks like the current Vice Chairman and first son, Oh Seung-hyeon, will be appointed Chairman early next year."

The biggest factor hindering the growth of the Korean stock market.

That would be succession.

It’s not like they’re passing down a royal throne or something.

They act like the sky will fall if they don’t pass on management rights and the company to their own bloodline.

The problem is that even shareholders take this kind of succession for granted.

Overseas, there is hardly any culture of passing down management rights to one’s children, but in Korea, this is particularly ingrained, so foreign investors see this as owner risk.

It’s precisely because of this that foreign investors do not keep their money in Korea for long.

They don’t think of growing the company through verified professional managers, and instead, easily hand over management rights to the eldest son, whose management abilities haven’t even been verified, simply because he shares their bloodline. Content orıginally comes from novel·fiɾe·net

“There’s nothing that can be done. In our country, it’s considered strange if you don’t pass the company down to your children. No wonder foreigners find our culture surprising. Even when stock cancellations or stock price drops occur during succession, there are no lawsuits.”

Even if someone were to file a lawsuit, it would be a losing battle.

The U.S. builds shareholder-centered companies, while Korea builds owner-centered companies.

That is the decisive difference between the domestic and overseas stock markets.

“So there are no issues related to LK Group that could cause problems?”

“Yes. The succession process has been completed. Also, LK Tower is supposed to be completed next year. Ah. Of course, it seems there were some financial issues during the construction process of LK Tower. But since there haven’t been any further rumors, it seems the problem has been resolved well.”

Looking at the data on LK Group, it showed a circular shareholding structure just like other Korean conglomerates. In other words, it was designed in a way that allowed control of the entire group with minimal shares by creating hundreds of circular ownership links.

Probably, even within LK Group, only a few insiders know just how complex this web is.

And only a few would know how to untangle this web properly. If the organization is mismanaged, the links could get tangled and cause problems in the ownership structure.

That’s precisely why the succession process was complicated.

Furthermore, digging deeper into LK Group reveals even more.

“LK Group currently controls all its subsidiaries through LK Corporation. But above LK Corporation, there’s another holding company.”

“Is it the Japanese holding company mentioned here?”

“Yes. Since LK originated in Japan. LK Orient controls LK Corporation, so essentially, the real owner is over there.”

Since LK started in Japan and expanded into Korea, it was perhaps inevitable.

“But surprisingly, many Koreans don’t really know. There are quite a few people who think LK is a purely Korean company. Well, after all, it’s a Korean person who’s controlling the company now.”

“But the more I look at this circular shareholding thing, the more fascinating and insanely complicated it seems.”

Controlling an entire group through numerous links and minimal shares.

No idea whose brainchild this was.

“Yes. There are circular shareholding companies in Europe as well, but the difference is that they’ve completely separated management from ownership. But in Korea, companies try to do both at the same time, which makes the structure even more complicated.”

And LK Group was the company with the most and most complex circular shareholding structure in Korea.

“But sir, why are we suddenly talking about LK Group…….”

“Ah. I was just a little curious. There was an article saying the succession process had been completed.”

I became interested in LK Group because of a very strong feeling I got that day while looking around the LK Tower model house.

And it was precisely because of this article.

‘I can still feel it now.’

An interview where Chairman Oh Dong-yeong’s second son, Oh Jae-hyun, said he would support his older brother Oh Seung-hyeon and help grow LK Group well.

That gave me a tremendous shiver.

Why?

Why was it this article, not any other, that gave me that feeling?

That’s when this thought suddenly crossed my mind.

‘What if Oh Jae-hyun is lying?’

I searched for other articles.

Articles that featured interviews in which Oh Jae-hyun said he would help his elder brother run the company properly.

And sure enough.

Only those articles gave me such a shaking feeling.

“Manager, these two brothers won’t get into a stock ownership fight, right?”

“Didn’t Oh Jae-hyun even say in the interview that he’s not interested in the chairman position?”

“Yes. But you know what they say. The one who says they’re not interested in money is usually the one most obsessed with it.”

"Surely...... you don't think Oh Jae-hyun is lying?"

“I looked into the articles, and in many aspects, Oh Jae-hyun’s performance is actually better than Vice Chairman Oh Seung-hyeon’s. Maybe he thinks he’s better than his older brother.”

Manager Seo slowly nodded.

“To be honest, as human beings, it’s probably a lie to say he has zero interest in the chairman’s seat. But Chairman Oh Dong-yeong already decided to pass it on to the eldest son, and the succession process is nearing completion. There’s probably nothing Oh Jae-hyun can do at this point, right?”

On the surface, Manager Seo was right.

But every time I read an article related to Oh Jae-hyun, my instincts kept signaling me.

Which means there must be something.

“Manager Seo, can you ask the Research Team to look more closely into LK Group’s ownership structure? Especially about LK Orient in Japan.”

“Ah, yes. I’ll look into it right away.”

Internally, I also know the succession is already over and that Oh Jae-hyun has no opportunity.

But there must be a reason this instinct keeps stirring.

That could really mean a coup by Oh Jae-hyun, or it might be something else entirely.

“If not, oh well.”

As long as it’s not a shoddy construction issue with the LK Tower I bought.

***

Since childhood, my father always said the same thing.

You must help your older brother lead this company well.

Always follow your brother’s words.

If your brother wants to do something, support him with everything you’ve got.

Brother, brother, brother!

To my father, only the eldest son existed.

Still, I worked really hard at the company, thinking, ‘Maybe he’ll look at me just once.’

Owner’s bloodline.

The second son who had already been pushed out of the succession.

I lived my whole life with that label, hiding my ambition, always standing where my father’s eyes could see me.

But the response was always the same.

‘Help your brother. Your brother is the owner of this company.’

That’s when I realized.

My father will never lay his eyes on me.

This company, from start to finish, was only meant for the eldest son.

No matter how much I struggle, no matter how much I prove my ability, my father only sees his firstborn.

Then there is only one path left for me.

Just like Yi Bang-won drew his sword and drove out his father and brothers to sit on the throne, I too must do the same.

“CEO-nim, we’ve arrived.”

Oh Jae-hyun opened his closed eyes.

He got out of the car and stopped to take a deep breath before entering the place where the shareholders were waiting.

The moment I open this door and walk in.

There’s no turning back.

I must cut ties with my father, my brother, and the entire LK family.

Is it truly worth that much?

“.......”

The hesitation didn’t last long.

Oh Jae-hyun opened the door without a moment’s doubt and stepped inside.

***

There is a man known as the father of short selling.

George Soros.

Even his name sounds like short. He was the man who predicted the collapse of the British pound and shorted it to the tune of 10 billion dollars.

10 billion dollars.

That’s more than 14 trillion won in Korean currency.

By today’s standards, that might not seem like a huge amount, but considering it was the 1990s, it held far greater value than it does now.

He shorted with 10 billion dollars, forced the British government to raise the white flag, and made a profit of 1 billion dollars.

Only 1 billion dollars?

You might say that, but that’s how short selling works.

While a long position earns as much as the price goes up, a short position profits from how much the price drops.

Also, the larger the amount of money at stake, the more profit you can gain even with a slight fluctuation, so you can’t hold the position for long.

Even if you predict the price will go down, if the price takes a curved path, a margin call can be triggered.

And there’s one more important point.

The 1 billion dollar profit from that 10 billion dollar investment happened in just one single day.

“But Department Head, aren’t you basically the Korean George Soros?”

“What are you talking about? Even George Soros wouldn’t be a match for our Department Head. Who in the world is better at investing than our boss?”

When George Soros shook the British government with a massive short sale, regulations were introduced in response.

In particular, new rules were put in place to regulate hedge funds that frequently short sell, and safety mechanisms were established to prevent major damage caused by them.

But regardless of such regulations.

The moment someone starts bleeding and staggering, the hungry hyenas rush in like wolves.

No law or regulation would protect a fallen prey.

“Considering the capital is so spread out, and since we’re using fund and securities lending services, and the fees are high, if we estimate based on that, the current figure is roughly…”

Deputy Manager Ahn Young-sang’s voice trembled slightly as he gave the report.

“1 trillion won.”

“Wow…….”

“One trillion won?!”

We had finally moved beyond the billion-won range and entered the trillion-won club.

1 trillion won.

It’s an enormous amount of money, but in the world of investing, it’s not particularly large.

Just look at KS, the largest financial group in our country, they manage over 300 trillion won in funds alone.

And on a global scale, even 300 trillion won isn’t much.

That’s because the world’s number one asset management firm, Whiterock, manages a staggering 4.7 trillion dollars, which is 5,600 trillion won in Korean currency.

We don’t even need to look that far. Just our own National Pension Fund manages over 500 trillion won.

Of course, what these all have in common is that the capital is not the company’s own, but rather the customers’ money.

Still, even if it’s customer money, since funds are managed based on strategic decisions, their influence cannot be ignored.

So, in a way, it motivates me.

Looking at companies far above my level, I find hope and a goal, that one day, I can reach that level too.

“As expected, Department Head… your goals are enormous.”

“KS manages over 300 trillion won, but that’s mostly customer money. If you managed 300 trillion with only company capital… that would be on the level of Kangseong Electronics, wouldn’t it?”

“Kangseong Electronics is over 500 trillion won.”

“That’s only when you count all their assets together. If we’re only talking about cash holdings, even Kangseong Electronics only has about 100 trillion won.”

“Heh. Saying ‘only’ 100 trillion won… Since when did we lose all sense of money?”

There’s a saying, shoot for the sun.

It means that when you throw a spear, if you aim for the sun, it will fly farther than usual.

In other words, the bigger the goal, the better.

“Ah. Department Head. And this is the document you asked for the other day.”

“LK Group?”

“Yes.”

According to the data provided by the Research Team, the Korean LK Group was in fact being controlled by LK Orient in Japan.

And LK Orient was currently an unlisted entity.

To ensure firm control, the founding chairman had established Orient as an unlisted company and then divided the shares held there, distributing them to allied parties.

“To acquire the shares there, you’d have to go through over-the-counter (OTC) transactions, but first of all, there’s barely any stock on the market, and even if some is available, it wouldn’t be enough to become a casting vote. The pro-Oh Dong-yeong faction holds too much of the stake.”

I reviewed the currently available shares related to LK Group.

No matter how much stock one buys in Korea, without gaining shares in LK Orient, there’s no way to control LK Group.

In other words, the critical point lies in the shares related to LK Orient.

“Hm?”

As I traced down the list with a pen, my hand suddenly stopped at one point.

‘JK Holdings?’

JK Holdings had recently put a stake up for OTC sale.

It was a portion of their shares in Industrial Holdings, which paid very low dividends and wasn’t even listed, so there was no chance of its price going up.

They were offering 17% of their stake in Industrial Holdings.

It was a stake worth 300 billion won.

At a glance, it seemed like a worthless asset, not even listed on the exchange.

You could tell, just by the fact that even after being on the market for a while, no one had shown interest in buying it.

“.......”

But my hand that had stopped there wouldn’t move down.

Squeeze-

As if telling me that this was exactly what I had been looking for, I pressed the pen so hard into the paper that it nearly punctured through.

***

Stummwagen’s stock price fell over 30% due to the Dieselgate scandal.

Struggling to breathe under fines from multiple countries, Stummwagen eventually faced bankruptcy rumors, prompting the German government to step in, likely because letting Stummwagen fail would force related companies to shut down one after another, causing devastating effects on the German economy.

And not just Germany.

All of Europe, which is interconnected with it, would suffer too.

“If we had pulled our money out any later, we might not have reached 1 trillion won.”

“Right? It’s true what they say, blood runs thicker than water.”

“The German government probably couldn’t allow Stummwagen to collapse like that.”

Stummwagen’s stock, which had plummeted, began to recover.

The biggest stroke of luck was that we had already withdrawn our funds in advance under Department Head Jung Jin-ho’s direction.

“Department Head must have predicted the German government would step in, right?”

“Exactly. When we see one move ahead, he sees ten. His timing for selling is always astonishing.”

But right after urgently pulling out the funds, the next investment was executed immediately: an OTC transaction.

This time, it was buying up shares released by a company in Japan.

“Isn’t OTC trading usually time-consuming? The fact that they sold as soon as we expressed interest probably means they were desperate to offload it.”

To conduct an OTC transaction, you need a platform.

Securities firms act in that role. Sellers essentially beg them to find a buyer, even paying advertising fees.

JK Holdings had entrusted their shares to KS Securities, the largest in Korea, in hopes of selling.

And that listing had been brought in by Manager Seo, under Jung Jin-ho’s instructions.

“But why did he buy this…?”

“Industrial Holdings? Where is that? Never even heard of it.”

“On top of that, there’s barely any dividend, and it’s not even listed…”

How could a sparrow understand the will of a phoenix?

And yet, this time he truly had no idea.

Why would the Department Head buy something like this for 300 billion won?

[We have breaking news just in.]

At that moment, the economic news playing in the office was interrupted by a news anchor with a breaking headline.

[LK Orient has held a board meeting and announced its intention to remove current LK Group Vice Chairman Oh Seung-hyeon from the CEO position and install Oh Jae-hyun in his place. Since LK Orient is the holding company that controls LK Group, a change in its representative effectively means a transfer of control over LK Group……]

“Huh? What are they saying? Dismissal? Out of nowhere?”

“Turn up the volume. Wasn’t the LK Group succession process already completed? Why would they suddenly give the CEO position to the second son?”

To summarize the news.

The second son, Oh Jae-hyun, had thrown ashes on a meal that was already cooked and declared that he would become the chairman himself.

‘What... Department Head was right. Oh Jae-hyun really was lying?’

Manager Seo, who had been watching the news, suddenly felt chills all over his body.

Oh Jae-hyun’s words about helping his older brother grow the group had been a complete lie.

He had launched a surprise move to manipulate the board, remove his brother from the CEO position, and climb above him to seize control of the group.

“So does this mean Oh Jae-hyun just stabbed his father and brother in the back?”

“Yeah. They say he pushed out both his father and his brother.”

“Wow. This is like something out of a movie. Is this real?”

This was the moment when LK Group’s war of princes began.

*****

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