Chapter 416: Time to Clean House

Despite the setting sun, the Il-seong Group's conference room was packed with people.

Seo Jae-hoon sat with his legs crossed, observing them with emotionless eyes.

"How did our Il-seong Group end up being treated like this? Does anyone here know why?"

Though his question was calm, not a single person in the room dared to speak.

"No answer? Are you all slacking off because my father's bedridden, or are you disrespecting me because I'm in this position?"

"That's not it."

Yoon Yong-seong, president of Il-sung Electronics' semiconductor division, spoke up.

"Selling the semiconductor business isn't a good choice. The future of Il-sung Electronics—no, the entire Il-seong Group—depends on semiconductors."

"President Yoon, are you saying this knowing full well which division shows the biggest deficit? Where else in the world do you lose money the more you produce and sell? Tell me."

The insane price war in the semiconductor market was strangling Il-sung Electronics and by extension the entire Il-seong Group.

Yoon Yong-seong bit his lip, unable to deny Seo Jae-hoon's point.

"I understand. But if we hold out, we'll ultimately be the victors."

"You mean Jungwoo Electronics will be the victor. Am I wrong? We can't cover Il-sung Electronics' losses through our subsidiaries like before. Yet you're saying we should continue the semiconductor business while bearing these massive losses?"

"…If we hold out for just one more year, the U.S. government will have to act. Then Jungwoo Electronics will have no choice but to stop this price war."

Yoon Yong-seong believed the U.S. government would move soon. They couldn't allow American semiconductor companies to go bankrupt en masse.

"Are you certain? Can you take responsibility?"

"Yes. If the U.S. government doesn't act by next spring, I'll step down from my position."

Seo Jae-hoon stared quietly at Yoon Yong-seong who had just played his trump card of offering to resign.

Yoon Yong-seong felt an indescribable chill from his cold gaze.

"Is merely stepping down enough? If you're going to bet, shouldn't you bet your life, President Yoon?"

"…"

Yoon Yong-seong swallowed hard, unable to answer promptly. The rumors circulating within the group came to mind.

The already tense atmosphere had grown even more ominous with rumors that Seo Jae-hoon wouldn't hesitate to kill.

"Let me ask one more thing. Why are you so insistent on developing non-memory semiconductors?"

"In ten years, non-memory chips will dominate the semiconductor industry. The profit margins are much higher there."

"No, President Yoon. What good is that if we go bankrupt? Why talk about ten years when we might not survive today or tomorrow? We're about to collapse right now. Shouldn't we focus on profitable sectors? Wake up."

"…No. I apologize."

Yoon Yong-seong finally bowed his head.

"Prepare to list the new corporation on the stock market as soon as it's established. That should put out the immediate fire. If it fails the listing review, we'll sell it even at a loss—keep that in mind."

"Yes, Vice Chairman."

After speaking, Seo Jae-hoon turned his head. His gaze fell on Il-sung Materials' vice president.

"Vice President Kim, what nerve do you have being here? After letting someone else take control of Il-sung Materials."

"…That was unavoidable."

"Shouldn't you have stepped down along with President Hong?"

"The Chairman told me to hold out…"

"Discuss that with my father later."

Seo Jae-hoon cut him off with an icy glare.

"Everything started going wrong when Il-sung Materials lost management control."

"…"

"How dare you show your face here so brazenly? Is it because you have no conscience at all?"

Il-sung Materials' vice president could only hang his head in shame.

Though they knew they'd face backlash for irritating Seo Jae-hoon, none of the assembled executives dared defend their colleague.

"Get out now. Don't set foot in headquarters until you've recovered management control of Il-sung Materials. Understand?"

"Yes…"

"I said now. Do I need to have you dragged out?"

"No, sir."

The berated vice president jumped up, bowed deeply and left.

The conference room's atmosphere turned arctic. Seo Jae-hoon, who had created this climate, spoke with clear distaste.

"Right now, only our consumer electronics, mobile devices and insurance company are performing well. Does this make any sense to you? This is the biggest crisis since Il-seong Group's founding. The empire my grandfather and father built is about to crumble. No, wait. I called you here to discuss countermeasures, but I've done all the talking. Well? Did any of you prepare solutions?"

No one dared speak.

Seo Jae-hoon clicked his tongue once before calling out to someone.

"President Oh Jeong-seok."

"Yes, Vice Chairman."

"How's the sale of Il-sung Motors progressing?"

"Several countries have shown interest. However… They're cutting the price so low that negotiations aren't progressing. The government won't approve selling at such a ridiculously low price either. Because of the merger with Jungwoo Motors…"

The merger between Il-sung Motors and Jungwoo Motors had instantly made them second in the domestic auto industry but reality proved challenging.

With Daehyeon Automotive dominating the domestic market, losses were bound to increase.

They were now in talks to sell to global auto companies, but negotiations weren't going anywhere.

"Ha. We shouldn't have acquired Jungwoo Motors. Father's unnecessary obsession with automobiles… Isn't this entire crisis rooted in that damned automotive business?"

"…"

No one dared respond to Seo Jae-hoon's criticism of Chairman Seo Yong-geon.

"If we keep getting dragged along without any solutions, we'll eventually collapse. Let's sell off all unprofitable subsidiaries and focus on profitable businesses."

Seo Jae-hoon called out to Director Lee Seok-min who sat with a stern expression.

"Director."

"Yes, Vice Chairman."

"Present the plan."

Lee Seok-min stood up.

Once second-in-command under Chairman Seo Yong-geon, Lee Seok-min had been reduced to merely following orders under Seo Jae-hoon.

"First, I'll explain our approach for Il-sung Life Insurance among our financial subsidiaries."

As Lee Seok-min presented the restructuring plan, Seo Jae-hoon leaned back in his chair.

His cold gaze never left the faces of the assembled presidents.

* * *

Park Young-geun and I finished our meal while catching up.

After drinking the sujeonggwa served for dessert, Park Young-geun spoke up.

"Well, Boss Kim. Let's get to the point. Tell me what I need to do. You must have had a reason for bringing me here. I'm still bewildered though. First I'm suddenly nominated as Fair Trade Commission chairman and told to prepare, then President Kim Hak-gwon contacts me… My goodness, everything's happening so fast it feels like a dream."

I smiled as I set down my empty sujeonggwa cup.

"We're planning to clean up the Il-seong Group now."

"…Completely destroying them won't help the national economy."

"But we need to make an example. If we break them up and let other chaebols acquire the pieces, there won't be major economic damage."

Before the IMF crisis, the Fair Trade Commission focused on monopolies and consumer protection, but around 2000 they began turning their blade toward the major corporations called chaebols.

Before the foreign exchange crisis, the government gave these corporations all sorts of benefits under the premise that big businesses fed the national economy.

This resulted in deepening ties between politics and business, leading to the terrible foreign exchange crisis.

Though the IMF made demands, public opinion naturally shifted toward reforming corporate groups.

The Fair Trade Commission, known as the economic prosecutor, led this charge.

"Hmm…"

Park Young-geun stroked his chin thoughtfully.

"So you're thinking the Fair Trade Commission and Financial Supervisory Service should move simultaneously?"

"Yes, if both agencies shake them at once, our side will coordinate its moves."

"So the Fair Trade Commission needs to stop them from controlling all subsidiaries through cross-shareholding?"

As expected of a smart person, he grasped my intentions without lengthy explanation.

"Correct. Now's the perfect time with Chairman Seo Yong-geon's fate uncertain. We can also restrict Vice Chairman Seo Jae-hoon's management control depending on how we interpret the regulations."

"…Il-seong Group belongs to the Seo family. It won't be easy to take it from them unless they sell willingly. Other chaebols probably won't want to get involved either. Then all our plans will be for nothing. If they withstand the Fair Trade Commission's attack, it might actually strengthen Seo Jae-hoon's control."

Il-seong Group wielded tremendous influence in business circles through blood ties and marriages.

In my previous life, they used their powerful connections and Il-sung scholarship recipients to control politics, administration and even the judiciary.

The mockery of them as the 'Il-sung Republic' wasn't baseless.

But in this life, I'd slowly eaten away at Il-seong Group from the bottom up.

Plus, Chairman Song of Daehyeon Group had helped isolate Il-seong Group in business circles before he passed.

Now no one would help Il-seong Group.

"Just give Il-seong Group a proper investigation this time. I'll handle everything after that. I'll make sure the other chaebols don't interfere."

"Hmm… It's not difficult if the chaebols don't help each other. Alright. I'll give them a thorough investigation."

"Though Vice Chairman Seo Jae-hoon tried every illegal method to inherit management control from Chairman Seo Yong-geon, we interfered and stopped him. Still, they probably proceeded in ways we don't know about. First, please cancel the split-off corporation created from Il-sung Electronics' semiconductor division."

Park Young-geun shook his head with a troubled expression.

"Cancel the physical division? That's difficult. It's not under Fair Trade Commission jurisdiction. That's for the Ministry of Industry or financial regulators."

"Yes, but the Fair Trade Commission needs to create justification for them to act. The Ministry of Industry, Financial Services Commission and Financial Supervisory Service can't move without cause."

"Create justification…"

When I nodded firmly, Park Young-geun's eyes darkened.

"Yes. Semiconductors will become a national strategic industry in the future. We absolutely cannot let it be sold to foreign companies."

"…Wouldn't it work if Jungwoo Electronics stopped the price war? That seems better than mutual destruction."

"Then Il-seong Group would recover with that strength. We can't allow that. I'll take Il-sung Electronics."

"But wouldn't that create a monopoly? If Jungwoo Electronics and Il-sung Electronics combine, the side effects…"

Park Young-geun voiced his concerns. Understanding his worries, I offered a reassuring solution.

"You know me. Don't worry about that. They won't combine into one company. Other countries wouldn't allow it anyway. We're planning to have Dream High Investment acquire it. The U.S. won't have reason to object to that."

Though they lost money on every sale, Il-sung Electronics led in memory semiconductor market share.

Combining the two companies would likely violate U.S. antitrust laws.

It might be just for show, but Dream High was an investment company based in the U.S.

So they couldn't openly oppose Dream High acquiring Il-sung Electronics.

"Once we block Il-sung Electronics' split, next you should shake up their financial subsidiaries. Order forced sale of their Il-sung affiliate shares."

"That's supposed to have a grace period…"

Park Young-geun's eyes trembled slightly. Did Il-sung spread rumors that Korea would collapse if they did? Why was everyone so scared?

Inwardly clicking my tongue, I handed Park Young-geun the folder I'd brought.

"Grace periods only work for companies that follow the law well. Look here—there's evidence of money flowing from Il-sung Life Insurance to non-financial subsidiaries. Couldn't we investigate that angle?"

Park Young-geun took the folder I offered and opened it immediately.

After checking the documents inside, his eyes widened.

"Where did you get this? This information could only be known by key executives."

The documents detailed all money flows since Vice Chairman Seo Jae-hoon began managing, including secret movements of funds from financial to non-financial subsidiaries.

I smiled at Park Young-geun's question.

"I received it from a reliable source. That level of evidence should help greatly when the Fair Trade Commission begins investigating."

"Help is an understatement. This is a divine sword—a divine sword! These chaebol types resist even when the Fair Trade Commission or Financial Supervisory Service demand documents. But with evidence like this…"

"I trust you, Chairman Park Young-geun. Show the chaebols how fearsome you are. Didn't you have to leave the Financial Supervisory Service because of your reforms? You need to properly show them you're not finished yet."

I stoked Park Young-geun's desire for revenge.

Nodding resolutely, Park Young-geun's eyes grew determined.