Chapter 61
Translator: Dreamscribe
“Wow. I’ve seen a lot of Chairman’s Offices and CEO’s Offices here and there, but this is the first time I’ve seen a place this extravagant.”
Probably, neither my few friends, nor my family or anyone else would believe it.
All I did was move to a new office, but Chairman Kang Sung-ho came to congratulate me with a gift.
“I didn’t actually expect you to come.”
“Of course I had to. Our CEO Jung finally got out of that cramped space and moved into this spacious CEO’s Office.”
It used to be called LK Tower, but now it had been renamed Kwangwoon Tower, the tallest building in South Korea.
Just as he had originally planned, hyung had created a private office for me here.
Not only a CEO’s Office, but also a control tower where I could lead multiple employees and carry out investments.
The tallest building in Korea.
The view of Seoul through the window looked so small, it almost felt like a game.
“It’s nice. When LK first said they were building the tallest tower in Asia, I thought it was bullshit. But seeing it now, it’s amazing.”
As he said that, Kang Sung-ho glanced at the large TV hanging on the wall.
“Is this from our company? Don’t tell me it’s from SG?”
“Of course it’s from Kangseong Electronics.”
The news on the TV was all about Deutsche Bank.
[Today, the United States imposed a $16 billion fine on Deutsche Bank for selling defective products during the 2008 subprime mortgage crisis, along with the 1MDB scandal. This amounts to about 20 trillion won, and Deutsche Bank has expressed its position that it is difficult to accept this…….]
Sixteen billion dollars.
Fourteen billion for exacerbating the 2008 subprime mortgage crisis.
The remaining two billion for involvement in 1MDB and conducting money laundering.
As a result, the global market was shaking right now.
“Tsk tsk. Those bastards. They should’ve known when to stop.”
Kang Sung-ho shook his head and sat down.
“Originally, it seems like they were negotiating a $7 billion settlement. They were probably working closely with Deutsche Bank.”
“And then 1MDB exploded?”
“That’s right. The US government slapped on an additional penalty out of spite.”
If everything had gone smoothly, Deutsche Bank could have minimized the fine.
But after the 1MDB scandal broke and their involvement in money laundering was revealed, the US government hit them with a massive $16 billion fine.
“But Deutsche won’t just sit back. Honestly, how can they possibly afford to pay a $16 billion fine? No matter how big they are. Even our Kangseong would struggle if we were told to pay $16 billion all at once.”
It’s a staggering 20 trillion won.
No matter how large the corporation is, being told to pay that amount at once would cause serious damage.
“They’ll try to reduce it by half no matter what. Because the German government can’t do anything about it right now. Thanks to someone.”
It seemed that someone Kang Sung-ho was referring to was me.
“CEO Jung laid the groundwork perfectly. Since the dieselgate scandal, the German government has been steadily offering bailout funds, so now they don’t have the capacity to help Deutsche.”
Laid the groundwork.
I never laid any groundwork.
As always, in the past, now, and in the future, I just make investment decisions based on my intuition.
“It’s really impressive. When did you start planning all this? I’m honestly starting to get scared. Is this what Zhuge Liang from Three Kingdoms felt like?”
But Kang Sung-ho seemed to strongly believe that I had been preparing for this moment for a long time.
“I just got lucky, that’s all. Do you really think I planned all that?”
“Really? That’s so strange. For some reason, everything you do turns out well. At this point, winning the lottery first prize multiple times in a row would be easier. Don’t you think?”
It was clear he didn’t believe a word I said.
“Whatever it is, thanks to you, expanding into Europe might actually get easier. But do you know why I’m so obsessed with Europe?”
I had heard that Kangseong Electronics had tried to enter Germany and set up a semiconductor plant, but Deutsche Bank had kept blocking them.
Deutsche’s motive was to protect the companies they had invested in, while Kangseong seemed to be trying to find a loophole to avoid their interference at all costs.
“Our DRAM follows what’s called a super cycle. It means there’s a cycle of booms and busts. There are times when semiconductor demand explodes, and other times when it’s treated like worthless junk.”
The concept of a super cycle in the semiconductor sector is well-known.
Especially in the DRAM segment, the super cycle phenomenon is extreme, during booms, factories can’t keep up with the demand, and during busts, there’s so much oversupply that it becomes a problem.
“Right now, we’re number one in the DRAM market, but that alone isn’t enough.”
“You’re talking about foundry, right?”
“Exactly. You really know your stuff.”
In the DRAM business, Kangseong is currently the undisputed leader.
However, as mentioned earlier, DRAM earnings fluctuate heavily due to the super cycle.
But foundry is different.
“A foundry is where we manufacture semiconductors on commission for clients, right? This business isn’t affected by the super cycle, and it’s the most lucrative, bringing in the best margins. The problem is that Kangseong doesn’t have any real power in the foundry market.”
That was because of TSMC.
TSMC, a Taiwanese company, is a dedicated foundry that manufactures semiconductors solely on behalf of clients. In other words, they never produce their own branded products.
“In a way, it makes sense. Companies like Apple and Qualcomm, who are in direct competition with Kangseong, all use TSMC. Even though Kangseong has better technology.”
Because from their perspective, they don’t want to fatten the pockets of a competitor like Kangseong, and since they’re rivals, there’s always a risk that the production lines could be tampered with, so they can’t trust them easily.
That’s why TSMC has this management policy:
<We do not compete with our customers.>
Unless this barrier is overcome, no matter how good Kangseong’s technology is, their competitors will have no choice but to choose TSMC.
“That’s why I want to create a foundry company that is separate from Kangseong. We’ll integrate with European semiconductor firms and form a completely independent company. That way, our technological capabilities will rise significantly, and most importantly, we can take away the market share that TSMC currently dominates.”
“You mean by presenting a management policy of not competing with customers?”
“Exactly. At first, the companies currently using TSMC might hesitate. But if our technology and production capacity are vastly superior, and on top of that we have perfect logistics capabilities that even exceed TSMC, they’ll have no choice but to reconsider.”
“When you talk about logistics capabilities, you mean Kwangwoon Shipping, right?”
“That’s right. It’ll be great for Kwangwoon too. We’ll be their primary customer.”
For us, it means having a solid base of major clients, so there’s nothing to lose.
“But right now, it’s all just a pipe dream. Ultimately, the key is that Deutsche Bank has to collapse.”
Deutsche Bank, one of the TBTF (Too Big To Fail) institutions.
It has to fall in order for Kangseong’s desired plans to be realized.
“And don’t we also need Deutsche Bank to go bankrupt so that Kwangwoon can profit from all those CDS they bought in bulk?”
“So you knew we swept up the entire supply.”
“How could I not know? I figured it out the moment I heard it. CEO Jung had planned all this long ago with this outcome in mind.”
The CDS holdings we currently have amount to 3 trillion won.
Not only did we buy up all the existing CDS on the market, we also signed new contracts with other firms for newly issued CDS, making up that total.
Simply put, it doesn’t mean we invested 3 trillion won, but if Deutsche Bank goes bankrupt, we’ll receive a payout worth 3 trillion won.
But if Deutsche Bank doesn’t collapse?
We’ll lose 90 billion won in cash every year.
No, possibly even more than that.
“Thanks to CEO Jung spiking the CDS spread, Deutsche Bank has fallen into even greater crisis. The spread is so high now that signs of a bank run are starting to show.”
To make money from CDS, Deutsche Bank has to go bankrupt.
But if Deutsche Bank really goes bankrupt, the securities firms and banks that sold us the CDS will be thrown into chaos, so they will do everything they can to prevent the bankruptcy from actually happening.
“On top of that, the German government can’t just stand by and watch either. It’s Deutsche Bank we’re talking about. If that goes down, it won’t just affect the European financial system, it’ll ripple across the entire world. But if Deutsche doesn’t fall, our Kangseong will slowly wither away. Ten years from now, we’ll be completely pushed out of the semiconductor industry. You could say this is the most critical moment for Kangseong’s survival.”
Chairman Kang Sung-ho’s expression was serious.
It seemed he had concluded that if this European expansion failed, Kangseong would no longer be able to survive on semiconductors ten years from now.
“I hope Kangseong does well.”
“Do you?”
“I told you before. I want our country’s companies to succeed, rather than foreign ones.”
That was sincere.
Even aside from that reason, in order for us to profit from the CDS we invested in, things had to go the way Kangseong intended.
“Yeah. You laid the groundwork, CEO Jung, so now it’s my role to swing the sword on that stage. One fortunate thing is that Deutsche Bank has made too many enemies over the years. Backed by the German government, they’ve been far too arrogant.”
Chairman Kang Sung-ho downed the rest of his coffee in one go and stood up from his seat.
“This time, I’ll be your sword. You’ve tied up the opponent and laid them in front of me, how can I not at least sever their neck? I’ve already contacted several financial groups. Even if Deutsche Bank goes bankrupt, those groups will absorb the fallout so that the impact doesn’t spread too far.”
Many say that if Deutsche Bank collapses as-is, it’ll be a second Lehman Brothers.
Chairman Kang knows that, and so do the financial groups working with him.
That’s why they seem to be discussing ways to contain the damage as much as possible.
“Oh, and the orchid I brought. It’s expensive. A bit tricky to care for, but it’s great for calming your mind. You’re a CEO now, you should have at least one of these in your office.”
It was an orchid that looked quite luxurious.
In dramas, you’d see people carefully wiping and tending to these.
“I’ve never raised one before, but I’ll try my best.”
“Good. And… thank you. Thanks to you, it feels like I finally see a breakthrough. Honestly, things had felt hopeless for a while.”
Chairman Kang Sung-ho shook my hand as he left the CEO’s Office.
In truth, I should’ve been the one saying thank you.
He was going to act as our sword and cooperate with European companies on our behalf.
***
“What- oppa, seriously? You were going to leave without even dropping by your little sister’s office?”
Just as Chairman Kang Sung-ho was about to get into his car, his younger sister came down with a few staff members. He let out a short sigh when he saw her.
“When did you get here?”
“When I heard you suddenly came to this building, of course I thought you came to see me. But no, you completely ignored your little sister and ran straight to CEO Jung Jin-ho?”
“He moved into his new office today. I came to give him a gift.”
“Wow. And what about me? When I was appointed as Hotel CEO, you didn’t even show your face!”
Did I really?
I felt like I had sent her something, at least.
“Come on, that can happen between family.”
“So Jung Jin-ho comes before your one and only little sister? I mean, what is he to you anyway? If you really think about it, isn’t he basically our enemy?”
“…What?”
“Seriously. Like changing this building’s name to Kwangwoon Tower, or how he took all that money from us and only gave us a hotel business license. Eventually, shouldn’t our Kangseong take over this tower too?”
At that, Chairman Kang Sung-ho’s face immediately turned cold.
“Watch your mouth.”
“Uh…?”
At the sight of her brother’s fierce expression, something she hadn’t seen in a long time, Kang Mi-ra took a step back.
“There are people in this world you can make enemies of, but there’s one person you must never, ever oppose.”
“And that’s Jung Jin-ho? Why? Does he have some kind of dirt on you or something?”
“That’s not it… I’ll explain more later. Just don’t see Jung Jin-ho as an enemy. And make sure you don’t say anything bad about him to anyone.”
Seeing Kang Sung-ho like this, Kang Mi-ra could feel it.
The fact that the mighty Chairman of Kangseong Group was now afraid of a mere securities company CEO.
“I’ve never once considered Jung Jin-ho an enemy. And I want to continue maintaining a friendly relationship with him. No, honestly, I want to go beyond just being friendly and legally become family with him.”
“T-that much?”
“Yes. That’s how I feel, so you should change how you think about Jung Jin-ho, too. That guy must never be our enemy, he absolutely has to be our ally.”
As he said that, Kang Sung-ho glanced at the employees standing around his sister.
“Make sure the staff keep their mouths shut.”
“Ah, yeah. Don’t worry about that. These people are tight-lipped.”
“Alright then, I’m off. I’ll stop by again if I get the chance.”
“You mean when you come to see Jung Jin-ho again and swing by here on the side.”
“Well, you’re not wrong.”
“Tch. Just go already.”
After seeing Chairman Kang Sung-ho off, Kang Mi-ra fell into deep thought.
If it were anyone else, maybe not, but her oldest brother saying something like that?
Up until now, she had thought of Kwangwoon and Jung Jin-ho as villains who just sucked money out of Kangseong, but it looked like it was time to rethink that stance.
“Ah. Everyone pretend you didn’t hear today’s conversation.”
“Yes, CEO-nim. Don’t worry. Our Strategy Team is a place where secrets are taken to the grave.”
“Good. Sigh, we were having a good meeting, and I ran out in the middle because of my brother. Anyway, we’ll resume in 30 minutes, so get everything ready.”
“Yes, ma’am.”
After CEO Kang Mi-ra went back inside, the Strategy Team Leader looked around at the staff who had accompanied her.
“You all know what to do, right? Keep your mouths shut. Since we’re the core team supporting the CEO, if we can’t even keep secrets, we’ll be the first ones to lose our heads.”
“Yes, sir!”
“Good. Then let’s get ready for the meeting.”
Then the Team Leader looked worriedly at an employee who hadn’t looked well for a while.
“Yoon-ah, are you feeling sick or something? You look pale.”
“Huh? Oh, no, I’m fine. Really.”
“Glad to hear it. Come on, let’s go. We’re short on time.”
“Yes!”
Jung Yoon-ah followed her team quickly, but her mind was already elsewhere.
‘W-what in the world is going on?’
There was no doubt, Chairman Kang Sung-ho had said Jung Jin-ho’s name.
And not just once, he had mentioned it several times, emphasizing how important he was.
She already knew her brother was doing well lately and making a lot of money, but for the Chairman of Kangseong Group to be that obsessed with him?
It felt like she was in some kind of hidden-camera prank.
He even said he wanted to go beyond being friendly, to become family?
‘Then don’t tell me my oppa is…’
Going to marry into Kangseong Group!?