Chapter 43
Translator: Dreamscribe
[The Largest-Scale Search and Seizure Conducted on LK Group. Former Chairman Oh Dong-Yeong to Be Indicted.]
As soon as Kangseong Group stepped in, the investigation into LK Group, which had been swirling as mere rumors, finally began in earnest. Whether it was just a coincidence or Kangseong Group had actually pushed the prosecution forward, no one knew, but the government had drawn its sword.
As a result, LK Group, which had been holding out, finally raised the white flag.
A final agreement had been reached to hand over LK Tower to Kwangwoon.
"I was wondering how long they could hold out. In the end, it came to this."
"LK Group held out for quite a while. They're probably scrambling right now, trying to inject the 2 trillion won they got from us into various areas."
Indeed, the power of Kangseong Group was formidable.
Seeing how it brought down LK Group, which had built up its walls and gone into tight defense mode, in an instant.
"Suddenly, attacks came from all directions, media, politicians, you name it. It’s not even happening to me, but I feel scared. Kind of feel sorry for them too. I guess this is what the power of Kangseong Group looks like?"
"Right. There's a reason people call it the Kangseong Republic."
If Kangseong hadn’t stepped in, how would this fight have ended?
Most likely, it would’ve dragged on endlessly and only Kwangwoon Securities would’ve taken a heavy hit.
"But isn’t it scary? I mean, the Department Head designed all of this from start to finish, right?"
From predicting the LK Group management rights battle and buying shares...
To selling them at triple the price and securing LK Tower as collateral.
Even extracting the funds needed to acquire LK Tower from Baekje Hotel.
"I used to think maybe he just got lucky... but apparently, it was our Department Head who made Baekje Hotel cough up 2 trillion won this time, right?"
"That's right. Whether it’s Kangseong or LK, they were all in the palm of his hand. Hehe."
"Seriously, I’ve got chills. What kind of thoughts do you need to have to be able to take over LK Tower? With a securities firm, no less?"
"Ahem. Don’t try to understand it. He’s operating on a level far beyond anything we can comprehend."
When they first came to the Prime Department,
Manager Seo had said something like that.
That working with Department Head Jung Jin-ho would make every day spectacular.
And it turned out to be true.
"Good morning, everyone."
"Good morning, Department Head-nim!"
What would he excite them with today?
That was always the question, and the anticipation.
"Before the meeting starts, please bring me some materials on Kangseong Electronics."
"...Excuse me? K-Kangseong Electronics?"
"Yes. Details on how much Kangseong Electronics’ stock could drop, what kind of events would have to occur, and so on. As detailed as possible."
"Y-Yes, understood."
"Let me know when you’re ready."
All the employees in the department froze.
"D-Did he just ask for materials on Kangseong Electronics?"
"Surely, he’s not targeting Kangseong Electronics next... right?"
Kangseong Group had completely crushed LK Group the moment they had something to work with.
And now he was asking for data on the electronics division, the core of Kangseong Group.
This didn’t feel normal.
"Just like Manager-nim said, every day is really spectacular."
"And now, we’re adding some thrill to it..."
Having gone through so many things working beside Department Head Jung Jin-ho, they thought there wouldn’t be anything left to surprise them, but they were wrong.
Manager Seo swallowed dryly, his heart pounding.
***
“Due to Brexit, the backlash from Europe has been fierce. They're all issuing aggressive statements every other day."
"Britain has already started rounding up and kicking out all the immigrants. They want to fill jobs with only British citizens."
"The problem is, because of labor costs, companies are actually reducing jobs instead. This trend is spreading faster than expected, and the UK government seems flustered."
Brexit was never a good choice.
That’s what people are saying now, and what they’ll continue to say in the future.
In other words, Brexit was a wrong decision driven by the madness and emotions of the crowd.
"This is a democratic world, so it can’t be helped. Even if it’s the wrong decision, if the majority wants it, you have to follow."
Though they haven’t officially left the EU yet...
The British government already seemed flustered, seeing the side effects erupting here and there.
So for now, they were somehow plugging the holes, but Brexit was already something they had declared.
It couldn't be undone.
Britain would likely regret Brexit for a long time.
“How’s the material I requested?”
“Ah, yes. Here it is.”
The employees appeared a bit tense today.
I received the documents and began scanning through them.
“Looks like the K7 model turned out pretty well this time?”
“Yes. The evaluations are excellent. The pre-order sales were so overwhelming. It was released yesterday, and everyone’s saying it’s a really well-made phone.”
The materials were full of good news about Kangseong Electronics.
Not only were pre-orders booming domestically, but the sales trends overseas were also tremendous.
If things continued like this, it looked like Kangseong Electronics might hit its highest-ever sales volume.
‘But then why did that happen back then?’
A few days ago, the K7 phone my younger sister brought home.
That time, the sudden spark startled me, and I dropped it. The phone died right then.
Maybe because of that, even when I touched the broken phone, I didn’t feel anything special.
‘Was it just that particular phone that had a problem?’
If I had known, maybe I should’ve bought one too.
Right now, supply was short, and unless you had a pre-order, it was hard to get one.
“Ah! Department Head-nim. I recently switched to the K7 too. Want to take a look?”
At that moment, Hye-rin-ssi waved her newly changed phone.
It was already prettily decorated with character accessories and stickers.
“Then may I take a quick look?”
“Of course~.”
I reached out to receive the phone from Hye-rin-ssi but paused for a moment.
If another strong spark burst out like last time, this phone could die too.
‘Better brace myself.’
I carefully received the phone.
“...Hm?”
Maybe I was just being nervous for nothing.
When I actually held it, I didn’t feel anything.
Was it really just that particular device that was odd?
“Ah? Deputy Manager Lee, you switched to that phone too? Me as well.”
At that moment, Manager Seo next to me also pulled out his phone.
Wait a second. Could it be...
“Manager-nim.”
“Ah, yes, Department Head.”
“Could I take a look at yours for a second too?”
“Yes. Here you go.”
Crackle–!
The moment my fingers touched the phone Manager handed over, a powerful spark jolted through my entire body.
In the end, the phone dropped onto the table.
“Ah no. I’m sorry, Department Head-nim. I must’ve lost my grip.”
“No, I should apologize. Is the phone okay?”
“Ah, yes. It’s got a case and a tempered glass screen, so it’s perfectly fine.”
No reaction from that phone, but this one emitted a strong spark.
Could it be a defect in certain devices?
But this spark was even stronger than during the Dieselgate incident.
Before that sensation disappeared completely, I moved my hand to the Kangseong Electronics stock.
“...!”
The tingling sensation that had been fading surged back again.
That was when I became certain.
‘There’s something wrong with this model!’
I didn’t know exactly what the problem was.
But that phone Manager Seo was holding definitely seemed to have an issue.
“.......”
I checked the positions we had currently invested in.
We’d been holding them this whole time.
Was this the sign that it was enough now?
The signal that hadn’t come until now was now vibrating in my temple.
It was finally time to harvest the seeds we had sown.
“Let’s recover all the funds we deployed in Europe. How much can we expect?”
“After calculating for fees, commissions and taxes, even after deductions... about 50%.”
“Wow-”
“Five hundred billion...”
About 500 billion won.
An astronomical amount.
It was a return rate that would’ve been difficult to achieve without a big event like this breaking out every now and then.
“Um, Department Head-nim... if you’re suddenly retrieving the funds... is it because you plan to put them into Kangseong Electronics?”
"Yes. As expected, you understand my mind well."
“C-Could it be... a long position?”
“No.”
“......!”
Manager Seo tightly shut his eyes upon hearing my words.
I wondered if he was about to object, but that wasn’t it.
“Short selling 1.5 trillion won won’t be easy. But I’ll look into how much we can realistically push through securities lending.”
“Yes, I’d appreciate it.”
At that moment, I stopped Manager Seo, who was about to carry out my instructions.
“Hold on a second, Manager.”
“Yes?”
“You dropped your phone earlier because of me, didn’t you?”
“Ah, yes. But it’s fine.”
“No, it’s not fine for me. Would it be okay if I bought you a new phone?”
“Huh? R-Really, there’s no need...”
“There’s a lot I’m grateful to you for. I was thinking of giving you a small gift anyway.”
At that, the manager looked at me with a surprised expression.
“A g-gift? From you, Department Head-nim?!”
“I heard earlier that Kangseong Electronics is selling a limited edition pure gold phone. Although it’s from the previous model, not the latest one... would that be alright?”
It was last season’s model.
I was worried he might not like it.
But Manager Seo was grinning from ear to ear.
“If it’s a gift from you, Department Head-nim, it would be an honor for my entire family. I’ll keep it as an heirloom for life.”
“Ah no, that’s not necessary.”
“Haha. But... is it just for me?”
“Of course. It’s a special gift just for you, Manager Seo, so make sure you use it, okay?”
“Thank you so much, Department Head-nim. I’ll use it till the day I die!”
Manager Seo returned to his seat beaming with happiness.
I didn’t expect him to be that delighted.
I’d better arrange to replace it as soon as possible.
That phone really gives me a bad feeling.
Maybe it’s nothing... but still.
***
Kangseong Electronics' new phone model, the K7, which received great reviews both domestically and abroad through pre-launch testing,
Had finally hit the market and was selling like hotcakes worldwide.
“It’s already sold out. All the pre-order slots are filled, and we’re currently ramping up production quickly.”
“At this rate, can we surpass the all-time sales record?”
“Yes. If this continues, it’ll mark the highest sales figures since the company was founded.”
“Positive news has already spread across the market, and the stock price has risen more than 10%. Many are predicting the stock might actually hit 2 million won.”
The stock price of Kangseong Electronics, which had climbed to 1.7 million won, was now aiming for 2 million won.
If the momentum continued, it wasn’t an impossible number.
“Keep monitoring market conditions. Don’t hold back on marketing expenses. Especially highlight the performance and this sales surge to stir up consumers’ desire to buy.”
“Yes, Chairman-nim.”
Chairman Kang Sung-ho let out a sigh of relief.
There had already been plenty of talk, illegal succession and all that.
There were also many questions about Chairman Kang’s leadership.
If there was one fortunate thing, it was that thanks to the noisy battle involving LK Group, the issue of succession in Kangseong Group had been buried.
Moreover, with Kwangwoon Securities jumping into the fray and further stirring the situation, public criticism toward Kangseong Group had subsided significantly.
In fact, they had intentionally fanned the flames a bit.
The more the arrows of criticism were aimed at LK Group, the less people cared about the Kangseong Group succession issue.
‘The 2 trillion won was a bit of a waste. But we took the No. 1 spot in the hotel industry, smashed LK Group, and above all, people no longer care about our issue, so it’s turned out for the better.’
He wasn’t thrilled that the Kwangwoon Securities guys got to sit back and feast, but all things considered, it was a win-win.
He didn't even expect K7, which could be called his first test stage, to sell this well.
If the stock price hit 2 million won like this and the next model also succeeded, no one would dare question Kangseong’s leadership.
“Chairman-nim, there is something I need to report.”
The president of Kangseong Securities, who had attended the executive-level meeting, remained seated even after everyone else had left.
“What is it?”
“Well... there's a rumor circulating in the finance sector that I thought I should report.”
“A rumor?”
“Yes. The rumor is that someone has taken a massive short position on Kangseong Electronics.”
Chairman Kang Sung-ho furrowed his brow.
Taking a short position implied that some party was doubting Kangseong’s leadership.
But it was a bit difficult to understand.
A short position now? While Kangseong Electronics is performing this well?
“The K7 has been receiving excellent reviews, and even knowing that, someone shorted it in bulk?”
“Yes. We can’t pinpoint the exact timing of the short sale, but it definitely happened recently. The Korea Exchange has daily short sale data, and the volume has increased significantly over the past few days.”
“And that’s specifically related to Kangseong Electronics?”
“Yes. When we compare it to our sell volume, it’s clear.”
Short selling is done anonymously.
Also, in the case of Kangseong Electronics, there are many foreign and institutional investors, so initially, it’s hard to tell whether the sell orders are profit-taking or actual short selling.
To confirm it, you have to compare it against the short sale data released by the Korea Exchange.
“Do we know who did it?”
“That’s not easy to determine right away. Short selling is anonymous, and since the transactions are spread across various institutions and brokerage firms through securities lending, it’ll take time to track.”
“I heard the regulations on short selling were going to change. Are they still not in effect?”
“A new regulation requiring mandatory disclosure for short positions over 0.5% is expected to be implemented by mid or late this year. But it’s not in effect yet. Even if it does take effect, if they short through securities lending, it’s still easy to hide their identity.”
Chairman Kang Sung-ho let out a short sigh and stroked his chin.
Someone was practically holding a funeral for them already.
It was insulting, but honestly, it didn’t seem worth paying attention to.
"Can't we just leave it alone? If the stock price goes up anyway, they’re the ones who’ll lose. We’re surrounded by positive news right now.”
Chairman Kang had some knowledge of finance.
If someone placed a short at the wrong time and the price soared, they’d be at high risk of forced liquidation.
“That’s true... but I was thinking, why not use them to pump the stock one more time?”
“Pump the stock further?”
Now that was intriguing.
“Yes. Borrowing stock for a massive short position is essentially a method of hiding one’s identity and position. If the position is revealed, they could be attacked from all sides.”
Securities lending through brokers was a way to borrow a certain quantity of stock to short sell.
It made hiding the position easier, and it was hard to identify who was shorting.
Above all, it was hard to secure that volume for large short positions just from the open market, so securities lending was used to fill the gap.
Then why would institutions agree to lend out stock?
Because they don’t lose anything and simply earn fees.
“But we quietly spread the word. That some major force has shorted a massive amount of Kangseong Electronics stock.”
“And that would work?”
“Kangseong Electronics’ stock is climbing on continued good news, right? If someone shorts under those conditions, and the stock rises even slightly, they’ll inevitably face a margin call.”
If they couldn’t withstand the pressure of a margin call and were forced to cover, they’d have to buy the stock at the current price.
After all, they need to repay what they borrowed.
“That’s why short hunters exist. They drive the stock price up high, force their opponents into liquidation, and profit from it.”
As he listened, a smile naturally formed on his face.
To think someone would make such a reckless bet against Kangseong Electronics simply because there was nowhere else to challenge.
“This should be fun.”
“Shall we proceed?”
“Yes. I don’t know who that force is, but make sure they cry out in agony.”
“Yes, Chairman-nim.”
After the president of the securities firm left, Chairman Kang leaned back in his chair.
Should I find out who it is?
No. There’s no need for that.
Once hunters from around the world gather and tear that fool apart, it’ll naturally make the news.
Forced liquidation leads to xxxxx's bankruptcy!
Just like that.
***
TL Note: You can read more about shorting a stock at the Wikipedia link below.
https://en.wikipedia.org/wiki/Short_(finance)