Golden Spoon Investor

Massive Accounting Fraud Uncovered at Daegwang Corporation

An audit by the creditor group revealed that Daegwang Corporation's actual assets stand at 17.4586 trillion won, a staggering 11.7444 trillion won less than what was recorded on its books.

Meanwhile, its liabilities have increased by 5.4035 trillion won, reaching a total of 31.9944 trillion won.

Not only Daegwang Corporation but several of its subsidiaries were also found to have engaged in large-scale accounting fraud.

As a result, the expected financial burden of the company's upcoming workout program is projected to be far greater than originally estimated—leaving the creditors deeply concerned.

Meanwhile...

Seok-won, seated behind a wide desk, murmured softly as he stared at the bold headline dominating the front page of every morning newspaper that day.

"At last, the hidden bomb has exploded."

What had surfaced was only the tip of the iceberg.

Unlike other conglomerates, Daegwang Group had grown by constantly acquiring failing companies, which naturally led to massive borrowing.

"Normally, that's when a company pauses its expansion, focuses on stabilizing the acquired firms, and strengthens its internal structure.

But Chairman Yoo Chun-seok chose an easier, simpler path."

He had falsified the books—reducing debts and inflating profits—to make companies that were effectively insolvent appear profitable.

"When the full extent of the scandal was revealed, what shocked people most was that Chairman Yoo had personally ordered the fraudulent figures himself—and that the manipulation had been going on for twenty years, long before the financial crisis even began."

In short, the nation's second-largest conglomerate, which had seemed perfectly solid on the surface, turned out to be nothing more than a castle built on sand.

For years, they had walked a tightrope, surviving through continuous accounting manipulation, until the Asian financial crisis struck like a massive tsunami.

Daegwang, which had relied on borrowed money from banks to stay afloat, suddenly found itself facing a dire situation.

"And what did Chairman Yoo choose to do then?

Instead of tightening the belt, he doubled down—expanding the fraud even further to hide the company's deteriorating finances."

Between 1997 and 1999 alone, Daegwang Group had manipulated its books to turn 41 trillion won in losses into profits.

"What's even more astonishing is that, using those falsified financial statements, they managed to secure an additional 10 trillion won in bank loans."

The fact that such deception went unnoticed for so long was nothing short of unbelievable.

"Even if leveraged management was considered normal for Korean corporations before the financial crisis, Chairman Yoo's actions crossed a line—far beyond what could ever be excused."

The most outrageous part of all was that the tens of trillions of won that vanished into thin air would ultimately have to be covered by taxpayers' money.

"He must have known full well that what he did could never be forgiven, no matter how powerful a conglomerate chairman he was. That's probably why he fled abroad before the accounting fraud came to light."

Even after committing such a colossal crime, Seok-won knew that Chairman Yoo Chun-seok would likely live in comfort overseas, untouched by the law—enjoying a life of luxury along with his family, funded by the money he had secretly siphoned away. The thought left Seok-won with a bitter expression.

In his previous life, Yoo Chun-seok had been sentenced to eight years and six months in prison, along with a forfeiture of 17.9253 trillion won—the largest amount in South Korean history—for ordering accounting fraud across Daegwang Group's subsidiaries, orchestrating fraudulent loans, and smuggling assets abroad.

Yet, after spending over five years in exile overseas, he returned to Korea and was granted a special pardon after serving only a few months.

Worse still, even while living a life of extravagance with his family, Yoo paid less than one percent of the forfeiture amount—only 89.2 billion won—before dying of old age.

"And even that 89.2 billion wasn't voluntarily paid," Seok-won muttered.

"Investigators managed to recover it only after a relentless pursuit that uncovered hidden assets registered under false names."

Seok-won stared coldly at the black-and-white photo of Yoo Chun-seok printed in the newspaper.

"In my past life, he slipped through the cracks like a loach and lived luxuriously abroad.

But this time, things will be different."

Just then, his phone vibrated. Seok-won glanced at the caller ID and answered.

[Nalse.]

Hearing Ryu Sang-fu's voice, Seok-won replied smoothly in fluent English.

"I was just about to contact you, but you beat me to it."

[Hahaha! Is that so? Seems like we're thinking the same thing, my brother.]

After the Chairman Zhang Daming incident, which had recently shaken all of Fujian Province, Ryu Sang-fu had come to regard Seok-won as more than just a friend—he now called him xiongdi (兄弟), a brother in all but blood.

[I've already spoken with the mayor of Yantai. The public security bureau should arrest Chairman Yoo Chun-seok sometime today.]

At those words, a faint smile appeared on Seok-won's lips as he held the phone to his ear.

It was the news he had been waiting for.

"Thank you for helping me with this difficult request."

[It was no trouble at all. The mayor of Yantai has been close to my family since my father's time, so things went smoothly.

And when he heard that Daegwang Group was being dismantled back in Korea, he readily agreed to cooperate.]

Considering that Daegwang Motors had made major investments in Yantai, such as building an engine plant, it would have been natural for both the mayor and the public security bureau to shield Yoo Chun-seok and aid in his escape under ordinary circumstances.

'Chairman Yoo probably believed that too — that he could stay in Yantai and monitor the situation at home from afar.'

But things had changed because Seok-won was now pulling strings from behind the scenes.

From the Yantai mayor's point of view, Daegwang Group's accounting fraud had effectively sealed the company's dismantling. It made far more sense for the mayor to cultivate a new relationship with Seok-won — the richest man in the world and a Wall Street titan — than to keep shielding Yoo Chun-seok, who had become a liability with his ties cut.

'With the chaos of the accounting scandal and a workout in progress, Daegwang Motors' newly built engine plant could be quietly seized — so there's no reason not to help.'

In fact, the Yantai mayor was already considering pretexts to arrest Yoo Chun-seok while he was in hiding, then seize the engine plant's shares.

In China, where power often trumps law, it would be easy enough to manufacture charges to arrest Yoo. Even without fabricated charges, bribery was common, and minor infractions were frequently overlooked to keep the economy growing. If public security set their sights on Yoo, a thorough search would inevitably unearth plenty of dirt.

'It's a shame to lose the newly built engine plant, but even if we only recover half of the 17.9 trillion won-plus forfeiture because he's caught quickly instead of escaping for years, it'll still be a very profitable outcome.'

Seok-won tightened his grip on his phone and said, "Thanks to you, taking over the company we want has become much easier."

[Glad it helped. Keep in touch.]

Ryu Sang-fu laughed heartily and ended the call.

Leaning back as he set the phone down, Seok-won twisted his mouth into a hard expression and spat out coldly, "It wasn't enough for him to cook the books and get astronomical fraudulent loans. Even as the group was collapsing, he abandoned his employees and siphoned off corporate funds to secure his own comfort. He ought to pay the full price for that."

Yantai City, Shandong Province, China.

One of the ten ports opened after the Opium War under the Treaty of Tianjin, Yantai once contained British and German concessions. As a result, the city still retained numerous old Western-style buildings scattered throughout its streets.

Inside a luxury hotel suite in the city center, Chairman Yoo Chun-seok had been staying for two weeks, unable to return to Korea.

"I think it would be best if you moved somewhere else."

"What?"

Chairman Yoo, wearing a gray cardigan and seated on a leather sofa, frowned and glared at the man.

It was Oh Chang-hak, his chief secretary, who had flown in from Korea on short notice. Despite his boss's irritated stare, he spoke with a grave expression.

"The Financial Supervisory Service has concluded from its preliminary investigation that the suspicion of accounting fraud is significant. They've begun an intensive special audit of the head office, the twelve subsidiaries under workout review, and the accounting firm involved."

"Hmm."

"At the same time, they plan to file a complaint with the prosecution, holding you responsible both civilly and criminally."

"Damn it!"

Yoo Chun-seok cursed loudly, and Oh continued carefully.

"In the worst-case scenario, the prosecutors could cancel your passport and request that the Chinese authorities arrest and extradite you back to Korea."

Chairman Yoo's face stiffened as he gripped the sofa armrest tightly.

"What did Assemblyman Choi and Assemblyman Kim say?"

At that, Oh Chang-hak lowered his head, his expression darkening.

"They said the situation has gotten too big… and that it would be difficult for them to help any further."

"Those spineless bastards!"

Yoo's face twisted with rage as he burst out shouting.

"They were all too happy to take bribes when the money was flowing, but now that things have gone south, they act like they don't even know me!"

"Even the Blue House has been pressuring you to return to Korea as soon as possible," Oh added quietly.

A bitter sense of betrayal made Chairman Yoo grit his teeth, but avoiding the prosecution and finding a safer place to hide took priority for now.

"Ungrateful bastards! Just wait and see."

With fury twisting his features, Chairman Yoo Chun-seok bit down hard on his lip and turned to his chief secretary, Oh Chang-hak.

"The U.S. or Europe would be too dangerous. Where do you think I should go?"

Oh, who seemed to have already given it some thought, answered without hesitation.

"How about Vietnam, sir?"

"Vietnam?"

Chairman Yoo narrowed his eyes. Seeing that, Oh leaned forward and explained in detail.

"Vietnam doesn't have an extradition treaty with South Korea. And since Daegwang Group has long treated Vietnam as its strategic base in Southeast Asia — making consistent investments — we've built strong ties with key government officials. I'm confident they'll protect you."

Indeed, Daegwang Group had been among the first Korean conglomerates to expand into Vietnam, pouring in billions of dollars in investments and cultivating special relationships with both the Vietnamese government and the Communist Party.

"Also, if you relocate there, you'll have access to the group's local assets and liquid funds. It'll make things far more comfortable for you," Oh added in a low whisper.

Chairman Yoo crossed his arms and thought in silence for a moment before nodding slightly.

"Not a bad idea. Quietly sound them out and see if it's safe for me to move there. If they agree, we'll leave right away."

"Understood. I'll make the arrangements."

Though he found it miserable to be reduced overnight to a fugitive constantly on the run, survival came first.

Once some time had passed, he was certain he could use the assets he had already stashed away to rebuild his fallen empire.

Just then, the doorbell rang from outside. The aide waiting nearby hurried to the entrance.

Moments later, the secretary returned, looking flustered — and Yoo, frowning at his expression, asked curtly,

"What is it now?"

"Who is it?"

"They say they're from Public Security."

At the mention of those unwelcome guests, Chairman Yoo Chun-seok's face hardened in displeasure.

"What would Public Security want here?"

"They won't say, sir. They're only demanding that we open the door. What should we do?"

Even as the secretary spoke, loud, impatient knocks thudded against the door from outside.

A sense of foreboding crept up his spine, but Yoo forced himself to stay calm.

"Open it."

"Yes, sir."

As soon as the aide opened the door, uniformed Public Security officers burst into the room, their heavy boots thumping across the floor.

"You're Chairman Yoo Chun-seok, correct?"

About a dozen officers lined up inside, and the one who appeared to be in charge eyed him with a crooked, cold gaze.

"Yes," Yoo replied curtly in English, his brow furrowing in irritation.

The man reached into his front pocket and produced a warrant, unfolding it deliberately.

"You are under arrest for the illegal disposal of factory waste and failure to pay wages."

"What nonsense is this?!"

Yoo's face stiffened with fury as he shouted, but the officers ignored him entirely, stepping forward to clamp handcuffs tightly around his wrists.

"M–Mr. Chairman!"

"What is happening…?"

Chief Secretary Oh Chang-hak and the attending aide both cried out in shock, but before they could move, the officers blocked their way.

Surrounded by Public Security, Yoo Chun-seok felt the cold bite of metal around his wrists — and in that chilling instant, he realised something had gone terribly, irreversibly wrong.

TL/n -

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