Chapter 36
Translator: Dreamscribe
“Department Head. LK Group and several funds are continuously requesting meetings with our company.”
What is essential in a battle for management control?
Money, of course.
Then where do we procure this money?
Using company funds is embezzlement.
However, embezzlement is something with many legal gray areas.
It is precisely by exploiting these legal loopholes that company funds are diverted and used for defending management control.
But if it crosses a certain line, it could lead to being handcuffed for breach of trust while trying to gain control. Also, currently, LK Group has poured an enormous amount of money into completing LK Tower, and it is said that there is not much remaining in their balance.
Then where can they receive a supply of money?
It was Private equity funds.
Private equity funds.
A non-public fund that gathers fewer than 49 investors without public advertising.
They usually operate quietly.
Then when an event occurs that stimulates them, they suddenly appear carrying a massive amount of capital.
Especially during intense battles for management control, private equity funds, whose names have never been heard before, pop up like mushrooms after rain.
Just like how the water deer, which overpopulate Korea, are an endangered species globally, management disputes are rarely seen abroad, but in Korea, they occur frequently and are considered an exciting event.
“As soon as the rumor spread that a battle for control of LK Group had begun, everyone started trying to get involved. Some funds have sided with LK Group Chairman Oh Dong-yeong or Oh Jae-hyun, and others, though not directly connected to those two, are trying to take this 5% we hold and sell it at a higher price.”
“From what I've heard, just like JK Holdings sold their shares to us through an over-the-counter transaction due to funding issues, Japanese companies holding shares in LK Orient are now selling them off to funds. And those funds are aligned with either Chairman Oh Dong-yeong or Oh Jae-hyun.”
With these funds supplying money and joining the battle, the fight for management control is intensifying.
But there’s a limit to the total amount of shares, and within that, whoever holds more will become the next chairman.
And this 5% we hold.
To the two forces with nearly equal share ratios, this 5% will be the final blow that determines the winner.
“It’s strangely thrilling and a bit odd that our securities firm is currently the most watched in the domestic stock market.”
As the deputy manager said, Kwangwoon Securities is the most focused-on entity in the domestic stock market right now.
That’s because the rumor has already spread widely that we hold the decisive card to determine the successor of LK Group.
“Now the important thing is the price.”
“We need to find the right price. It might also be good to quietly raise the price little by little so that the two sides will compete.”
“But if we cross the line too much, they might find a way to fight without including our shares, so we need to be cautious about that too.”
“Where was it before? Right. HS Group. They also ended up releasing a paid-in capital increase because the share price rose too much during a management control battle, didn’t they?”
In overseas markets, such incidents would likely lead to lawsuits, but in the domestic market, they happen quite frequently.
Yet because there’s rarely significant punishment, such things keep happening, and now domestic investors treat them as just another kind of event.
“Manager. How are other places evaluating the share price?”
“Ah, yes. Since the governance structure is so complicated, the shares were all tangled up at first, and it was hard to determine a proper price, but now, it seems that giving around 30% above face value is considered the norm. In some negotiations, they even go as high as 50%.”
“They did that elsewhere?”
“Yes. In Japan, it's said that shares were already handed over to a specific fund at a 50% premium. I don’t know the detailed transaction info, but that’s what the rumors say.”
Maximum price, 50%.
At that level, it was a price offered with a certain degree of loss already factored in.
That’s why the companies in Japan holding friendly shares are all dumping their volumes.
“Most people thought Chairman Oh Dong-yeong’s side had the advantage, but once the shares were gathered, the ratio turned out to be almost exactly even. That’s why attention suddenly shifted to us.”
Both Chairman Oh Dong-yeong and Oh Jae-hyun had already nearly completed securing their shares.
We were the only ones left.
“Department Head, what do you think is the fair price?”
The employees all looked at me at once.
I answered without hesitation.
“Three times.”
“……Huh?”
They all looked as if they had misheard something.
But they hadn’t misheard.
I had already set the price for the 5% stake I was holding.
“I see 900 billion won as the fair price.”
“What!?”
***
Anyone even slightly involved in stocks right now is watching Kwangwoon Securities.
People think Kwangwoon Securities is playing a fun balancing act with this 5% stake they’re holding.
But fun, my ass.
The ones feeling the most anxious were the executives of Kwangwoon Securities.
“CEO-nim. A report came in from the Prime Department. They’ve decided on the share price for LK Orient.”
“Finally!”
“I thought I was going to die waiting.”
CEO Hwang took a glass of water to calm his nerves and asked,
“What price did Jin-ho set it at?”
“900 billion won.”
“!?”
CEO Hwang Dae-woon unintentionally spat out the water he had been drinking.
But no one frowned at the sight.
That’s because they were also left speechless the moment they heard the price.
“Did we hear that wrong?”
“900 billion?! For something worth 300 billion, he wants to sell it at three times the price?”
“No, he actually believes it’s possible right now......”
There was a reason the executives were making a fuss.
According to the intel already secured by Kwangwoon Securities, Chairman Oh Dong-yeong and Oh Jae-hyun are offering a maximum of 50% above the current price.
Sure, they might be able to negotiate a few percent more, but......
“Three times-”
It’s a bit rude to say this, but that kind of pricing is practically daylight robbery.
No matter how desperate someone is for control, would they really burn 900 billion won for 5%?
“Rationally speaking, three times the price just doesn’t make sense.”
“Right. But the guy who stabbed both his father and older brother in the back, would he really be rational? Management disputes aren’t just about logic. They’re battles tied to a man’s pride.”
There’s a famous saying in investing.
Abandon emotions and think rationally.
But that’s one of the hardest things to actually do.
Especially when management disputes overheat, while things may start off calm and logical, it eventually turns into a pride battle.
“No matter how scary a man’s pride fight can be, wouldn’t 900 billion be enough to bring back someone’s lost sanity?”
Having already spent all their money on constructing the tower, those in LK Group didn’t have enough internal funds to continue the fight, so they teamed up with funds to wage this management war.
But 900 billion won was an enormous expense, especially when they also had to think about the future after this fight was over.
“No matter how you look at it, I don’t think Chairman Oh Dong-yeong or Oh Jae-hyun will buy the shares.”
“Yes. I might lack experience, but anyone can see this price is set far too high.”
“.......”
The executives were right.
Anyone in their right mind would know that price is absurd.
But what matters is who set that price.
“If Jin-ho put that price tag on it, he must have a reason.”
With the two new rules at Kwangwoon Securities.
Rule 1: Do not doubt Jung Jin-ho’s investment decisions.
Rule 2: Remember Rule 1.
CEO Hwang Dae-woon followed those rules very well.
But simply believing wasn't enough.
Shouldn't he think of ways to help with his best effort, even if minimal?
That’s the role of an executive.
“Did Jin-ho reject all the meeting requests?”
“He didn’t directly reject them, but he hasn’t responded either. I think he’s putting them on hold.”
“I see……”
That’s how it is with products.
You have to make the other party want to buy before they open their wallet.
No matter how crazy the price is, if they develop a desire to purchase, they'll buy it even if they have to strain themselves. And he felt that somehow making them anxious for it was his role.
“Contact both sides. I’ll agree to a meeting, but only if the top decision-makers come.”
That meant both Chairman Oh Dong-yeong and Oh Jae-hyun had to sit at the negotiation table.
“You’re going to meet them yourself, CEO-nim?”
“Yes. If Jin-ho set the price, then I should do my best to sell.”
“Then wouldn’t it be better to send Department Head Jung Jin-ho...?”
“No. That won’t do. What are higher-ups for? They’re here to act as the shield. In matters this serious, I have to step forward. If someone has to take responsibility, it should be me.”
There was no intention to use Jung Jin-ho as a shield.
It’s the same in games.
Jin-ho always acted as the raid leader, but whenever there was an issue, it was Guild Master Hwang Dae-woon who stepped up and took responsibility.
It’s the same in a company.
While Jung Jin-ho is the raid leader guiding this investment, the one who has to bear the responsibility is Hwang Dae-woon, the CEO of the company, himself.
"Make contact. Tell them to meet as soon as possible."
***
Kwangwoon Securities.
One of Korea’s top ten securities firms, though frankly, anything below the top three was just so-so and could be considered second-rate.
Yet one of those second-rates now held LK Group’s fate in its hands.
“Director, how on earth did Kwangwoon Securities know and secure those shares in advance? Other than a few people, no one should’ve known I was going to stab my father in the back.”
It was a question implying: wasn’t there a leak?
“Even before you, President-nim met with shareholders to persuade them, Kwangwoon Securities had already secured those shares. There was no chance for information to leak. The timing was just uncanny. They acquired the shares right before we made our move, so we couldn’t even recognize it in advance.”
Today, Hwang Dae-woon had arranged a meeting, and despite being the CEO of a second-rate firm, he had dared to summon both LK Group Chairman Oh Dong-yeong and Oh Jae-hyun to the same table.
Normally, such arrogance would have been ridiculed, but the fact that they had to cancel all their plans and rush to the meeting location only deepened their frustration.
“So, whether it was a leak or not, they had already secured the shares before we made a move, right?”
“Yes. It’s like something out of a ghost story. No one knows why they suddenly picked up a bunch of seemingly useless shares. Only Hwang Dae-woon would know.”
Gathering the two men in one place was clearly a tactic to spark a bidding war, but if the opponent was his father, it wouldn’t be an easy fight.
“Ah, welcome, President-nim. It’s an honor to meet you. I’m Hwang Dae-woon, CEO of Kwangwoon Securities.”
“Ah, yes.”
When he arrived at the meeting location, CEO Hwang and his father were already waiting.
Chairman Oh Dong-yeong glared fiercely at his son.
"You vicious bastard. Finally showing your ugly face.”
“......I’m sorry.”
"Right. Since we're meeting like this anyway, let me ask the reason. Why are you doing this crazy thing? Are you out of your mind? Of all the people you could’ve betrayed, you chose your father and your brother? You’ve betrayed our family. Do you understand that?!”
Emotion stirred inside.
“If you had given me even one chance, I wouldn’t have done this.”
“What, what did you just say?”
“Isn’t it too unfair to hand over the company just because he’s the eldest son? What do I lack compared to hyung?”
“There’s a reason why they say no younger brother surpasses his older brother. You really think you’re all that? You can’t even see one step ahead! Just because you had a few good quarters, your arrogance is through the roof.”
As the emotions of the two heated up, CEO Hwang smiled and stepped in to mediate.
“Now, now, please calm down. You can fight all you want after this.”
“Phew. So you’re CEO Hwang? I won’t say much. 50%. That should be enough, right? No more games, give me the shares. I need to end this nonsense quickly and deal with that insolent brat.”
50%.
It was indeed the amount he expected.
“CEO Hwang, we can go up to 60%.”
“Hey! Oh Jae-hyun!”
“Father. I didn’t come here today as your son.”
“You ungrateful bastard...!”
“CEO Hwang. Please make your decision. Will you sell at 60%?”
Hwang Dae-woon quietly looked around at the two men, both burning with tension.
The bitterness between the father and son was deeper than expected.
He had initially planned to provoke their pride and pit them against each other, but it seemed there was no need for that.
“I’ll now tell you the price we’ve set for this 5% stake.”
“Don’t stall and just say it. How much do you want?”
Hwang Dae-woon grinned and said,
“900 billion won.”
“......?”
It was clear these two were father and son.
They both blinked in the exact same way.
“9-900 billion!?”
“What is this, CEO Hwang? Are you joking right now?”
“I don’t know how to make jokes. Let me repeat, the price we’ve set is 900 billion won. We have no intention of reducing even a single won, so if either of you is interested, feel free to reach out.”
Chairman Oh Dong-yeong burst out shouting.
“CEO Hwang, are you out of your mind? What? 900 billion? You think that’s the name of some corner store!?”
“I’m still perfectly sane. I suspect I’ll only get cursed at if I stay here any longer, so please take your time and think it over with a clear head. That’s all.”
Remaining calm to the very end, Hwang Dae-woon left the room.
Even as he walked toward his car, he kept a composed smile on his face.
And the moment he got into the car.
“Whew-”
Only then did he finally let out the breath he had been holding as the tension released.
“I really thought my heart was going to stop.”
He hadn’t thought much of it before the meeting, but the moment he stood in front of Chairman Oh, he had been trembling inside.
The old man was said to be bedridden with old age, but…
Was that a lie?
His presence was like a tiger’s, and his voice was no joke either.
Still, he had tried very hard not to look intimidated.
All for the sake of completing the setup Jin-ho had prepared.
"The atmosphere between those two was no joke."
All he had really done was get the two of them in a room to fight.
In truth, Hwang hadn’t done anything particularly special.
“Which of the two is going to buy it?”
Hopefully, one of them would.
***
After Hwang Dae-woon left, a brief awkward silence filled the room.
But soon, Chairman Oh burst into laughter.
“That crazy bastard. Blinded by greed. Looks like it’s all over for him. And yet he still thinks he can hold out?”
“Over? What do you mean?”
“Do you have the money to buy that for 900 billion? You don’t. You’ve probably already maxed out company funds. Pulling more would be embezzlement. And the funds? Are you going to borrow 900 billion from those guys? You think they’ll just leave you alone even if you take over the company?”
In short, the moment he paid 900 billion, it would be like dousing himself in gasoline.
“The game is already over. Once you’ve been bitten by those greedy hyenas, you’ve got no cards left to play.”
“What about you, Father? You can’t buy it either, can you?”
“Of course I can, if I want to. But do I need to? At this rate, I already have the upper hand in share ratio. And I have zero intention of handing 900 billion to some thug like him.”
Chairman Oh Dong-yeong stood up with a refreshed expression.
“Wrap things up and come back quietly. You’re still my blood, I'm not going to kick you out entirely. But you’ll rot forever in the plastics factory. Spend your life repenting for your sin.”
Confident in his victory, Chairman Oh left the room after delivering his final warning.
“.......”
Left alone, Oh Jae-hyun stared blankly at the ceiling.
The drinks were served, and the food arrived, but he didn’t take a single bite.
Was this really the end?
Just like this?
“No.”
It wasn’t over yet.
“Director.”
“Yes, President-nim.”
Director Choi, who had been standing silently by his side since the end of the meeting, bowed his head deeply. He, too, must have sensed defeat.
“Shall we... pour some gasoline on ourselves?”
Director Choi flinched and strongly objected.
“Excuse me? President-nim, you’re not seriously thinking of paying 900 billion, are you? That’s absolute madness!”
“I know. I know it too. But I don’t want to end my life like this. Director, you'll have to resign if things go on like this too. Do you really want to end it like this?"
“......”
If they were to surrender like this and give up everything, that would truly be a disgraceful end.
Like Yi Bang-won, the moment he drew his sword, he had sworn.
No matter what happens, he would take this company.
No matter what!
*****
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