After Seong-ho and Do-beom left, Tak-hyeon sat alone, keeping the chamber.
Some two hours passed that way before Do-beom returned.
“You’re back?”
“Yes. I’ve handled everything.”
Do-beom answered and looked at the ashtray before Tak-hyeon. Cigarette butts were piled high inside it. Thinking he’d have to replace the air-circulation filter, Do-beom reported, “I conveyed our position clearly to the president’s side. And I promised 20 billion in campaign funds.”
Hearing it, Tak-hyeon wore a sour expression. “Right. With the campaign funds we’ve promised, the sitting president can keep exercising influence over his party, so he won’t be able to say anything more. We’ve saved his face, in effect.”
The other side had come asking a favor, and not only had they refused it — they’d spent money too. And the 20 billion wasn’t the end of what had to be spent.
“As Kim said, don’t forget to make the same promise to the opposition side.”
“Yes. Understood.”
They’d decided to fund not only the president’s side with 20 billion but the opposition with the same amount.
Tak-hyeon’s sour expression deepened. “We’re the ones who received the favor, and we end up only spending money instead. Four hundred billion of it, no less. Heh.” He thought a moment and shook his head. “And considering we won’t recover the 300 billion already spent on top of that, the loss this time is enormous.”
At that, Do-beom said carefully, “Since you’d made up your mind to acquire Dubo Steel anyway, might it have been better to play ignorant and grant the president’s request?”
Do-beom didn’t mean they should have granted it. With everything already handled, the choice couldn’t be reversed. He only offered it to confirm once more that Tak-hyeon’s decision had been the better choice. Tak-hyeon caught that intent too.
“The president has less than a year left in his term. How far could we cover up his disgrace? Try to cover it and we could get dragged in ourselves. Thinking of the future, cleanly giving up the 300 billion is best.”
“Then couldn’t you have withdrawn simply by refusing the request?”
“Did you not hear what Kim said a moment ago?”
Tak-hyeon clicked his tongue and repeated Seong-ho’s words exactly. “However toothless he’s become, a president is a president. If he holds a grudge and swings his blade at us, a toothless blade can still lop off an arm or a leg. With bad luck, a head might fly…”
He gripped the cigarette pack in his hand tight. Steadying himself, he said, “Don’t cling to it. We’re in the wretched position of spending 400 billion more just to lose 300 billion now, but… what can be done? We ought to blame the choice itself — jumping in to try to swallow Dubo Steel in the first place.”
He hurled the crumpled cigarette pack toward the ashtray and rose. “Let’s end the Dubo Steel matter with this.”
Having answered Do-beom’s questions and settled his own mind, Tak-hyeon resolved to cling to it no longer. “But someone has to take responsibility for the failed investment.”
Rising, he stopped before the door. He turned his head to Do-beom and instructed, “Have that Sang-jong fellow — who proposed the investment first — take responsibility for this.”
“Yes. Understood.”
Tak-hyeon walked the brightly lit corridor and left the chamber.
Chung-seop swallowed dryly and said to Seong-ho, “Director. Is the Dubo Group… really going under?”
“‘Going under’ isn’t quite it — ‘being wound down’ would be the right term.”
Seong-ho answered while looking around the office, tidy and clean now.
To Chung-seop, it was utterly unbelievable that the Dubo Group — which had hovered around 10th in the business rankings — had collapsed in an instant. That was why he kept asking Seong-ho.
“Anyway, you’re saying Dubo vanishes from the world…?”
“The name will vanish. But the company won’t. The creditors will tidy it up and polish it clean to recover even a penny, and try to sell it elsewhere.”
Seong-ho tapped the chair with his hand and asked, “By the way, CEO Jo — isn’t this chair uncomfortable? You should buy a better one.”
“Ah, Director, that’s not what’s important right now.”
Waving off the question, Chung-seop threw out another. “Ilhyeon Group really isn’t going to acquire Dubo Steel?”
He came closer and said in a low voice, “Right now there’s a rumor all over the market that Ilhyeon Group is acquiring Dubo. So…” He glanced around a moment and, in a lower voice still, said, “The market’s stirring. At this rate the index might rise again.”
The composite stock index had fallen close to 10% from the Dubo Group crisis. Seong-ho’s account — which had struck a futures short before the Dubo crisis broke — as well as Future Advisory, which had taken a short position following Seong-ho’s, had made a fortune from the Dubo Steel affair.
“Director. With the index down 10%, we’re sitting on a return of over 50% — shall we wind it up around here? If Ilhyeon Group does acquire Dubo, the return we’ve made so far might all fly away.”
Chung-seop asked, thinking it right to unwind the position here. But Seong-ho said nothing, slowly looked around the office, and went into the room set up for Chung-seop in one corner.
Chung-seop quietly followed his silent back with a frustrated heart. Confirming that Chung-seop, who’d come in after him, had shut the door, Seong-ho spoke. “CEO Jo. I’ll tell you this once and for all, so listen well.”
“Yes, Director. Please, go ahead.”
Chung-seop swallowed dryly and lent his ear.
“Whatever talk comes out in the market, I have no intention of unwinding the position this year. When expiry nears, roll it over and keep carrying the position to the next contract month.”
“Keep it? Where on earth is the target price…?”
Carrying a futures position forward continually, paying even the rollover cost, wasn’t common. Even when it happened, only those holding what were called long positions — futures buys — tended to hold long. That was why a rising position was called long and a falling one short. Because declines came short and sharp, holding a short position for a long stretch was not a normal situation.
Yet Seong-ho said he’d hold the short long — and at the very start of the year, no less, maintaining it all year. So Chung-seop found Seong-ho’s position strange.
Seong-ho lightly patted his shoulder. “The target price? Once the composite stock index shows a 2 in the front… that’s when I mean to unwind.”
He gave Chung-seop a bright smile.
Knock, knock.
“CEO.”
Lost a moment in other thoughts, Chung-seop came to at a staffer knocking and calling.
“Huh? Oh. What is it?”
The staffer asked about the investment direction for a client coming in a little later. “CEO. What shall we do? Shall we recommend growth stocks — construction and securities issues — as we discussed at this morning’s meeting?”
At the question, Chung-seop sank into thought without a word. Then, as if he’d made some resolution, he bit his lip hard and shook his head. “No. Let’s change the recommendation list.”
“Change it to what?”
The staffer opened the notebook he’d brought and lifted his pen to it, ready to write down Chung-seop’s instruction.
“Steer investment toward safe assets as much as possible.”
“Safe assets…”
Writing the words in the notebook, the staffer asked specifically. “By safe assets… you mean bonds, right? Then how many years on the government bonds should we propose? Considering returns, long-term issues like ten-years or corporate bonds seem fine too… As it happens, corporate bond yields are coming out very well because of the Dubo Steel affair. I think corporate bonds are both safe and decent on return — shall we set the direction that way?”
Chung-seop shook his head. “No. Absolutely not. Bonds — corporate bonds especially — absolutely not.”
He spoke as if buying corporate bonds would spell disaster, and muttered to himself, “Gold, maybe…? No. If it really comes to that, gold can’t be called safe either. Gold’s safe when things are moderately bad — in a situation where everything collapses, gold’s no safe asset.”
Pen in hand over the notebook, the staffer wore a puzzled look. Safe assets usually meant bonds and gold, yet Chung-seop was speaking as if they were dangerous. With a face that asked what on earth was safer than gold and bonds, the staffer looked at Chung-seop — and Chung-seop, as if something had struck him, asked, “Didn’t they say Central Bank, the American bank, is opening a branch in Seoul this time?”
The staffer nodded. “Yes. They said they’d open branches in Myeongdong and Gangnam.”
Confirming the news he’d heard wasn’t mistaken, Chung-seop’s face brightened. He threw out a few more questions. “They said they’d run some special event too… a sign-up event.”
At that, the staffer recalled a Central Bank employee coming by, and nodded. “Yes. They said they’d add 0.2% in bonus interest. But why…”
Then, with a flustered look, he asked, “CEO. You’re surely not saying to recommend deposits to the client?”
Chung-seop nodded. “That’s right. Recommend a Central Bank deposit.”
“CEO!”
The staffer looked ready to cry.
Clients who came to an investment advisory — not even a securities firm — were no ordinary people. They came to Future Advisory to be recommended places where, if it failed, they’d lose everything invested, but if it succeeded, they could eat several times to several dozen times over.
To such people, a safe asset was a top-ten-market-cap stock like Ilhyeon Group. Being told to recommend a bank deposit — not even a corporate bond — to people chasing above-market returns is what shocked him.
The staffer sent Chung-seop a look asking whether he was serious, and Chung-seop said in a firm voice, “Not just today’s client — propose to every client that they move their funds into a Central Bank deposit. Wind up all the accounts we manage on discretion too. Except the futures accounts.”
“CEO. Then what… do we live on?”
The firm couldn’t run on the commissions alone from connecting bank deposits. Worried about that himself, perhaps, Chung-seop shut his eyes tight. The thought came that he might be making a decision that could drive away every client, barely any time after founding the firm.
But Chung-seop steadied himself.
I have to follow the Director.
Seong-ho was a man who’d turned 100 million won into tens of billions. And that man had said, full of conviction, that he wouldn’t unwind the position until a 2 showed in the front.
At present, there were only two ways the composite stock index’s front digit became a 2. Either 2,000, or 200…
He wouldn’t be saying he’ll hold a futures short until the index hits 2,000 — so the Director means an index of 200.
Going from where it stood now down to the 200s meant the composite stock index becoming one-third of itself. If that happened, there’d clearly be nothing left standing, bonds or gold. That was why he’d spoken of a bank deposit.
And Central Bank’s deposit was special.
A foreign-currency deposit.
A deposit that could be placed at an American bank several times safer than domestic banks, in dollars — the reserve currency, incomparable to Korea’s won. This, truly, could be called a safe asset.
Teeth clenched, Chung-seop said to the staffer, “Don’t worry. I’ll cover your wages even if I have to sell the house I live in, so follow my word. Central Bank’s foreign-currency deposit. That’s Future Advisory’s one and only recommended pick.”
Chung-seop gave the instruction and clenched his fist.
Trusting Seong-ho, he’d thrown down the gambit of leaving Ilhyeon Securities, and this time too he’d thrown down a gambit following Seong-ho.
Shaken by the Dubo Group insolvency though it was, the composite stock index still lingered in the 800s at this point.
(End of Chapter 69)