April 12, 1996
In the executive office of Daehung Group's headquarters in Mapo, Chairman Park Tae-hong sat on the sofa, flanked by Seok-won, Park Jin-hyung, the president of the textile division, Gil Sung-ho, the chief secretary, and Seo Jin-hyung, the finance director.
"The results of yesterday's 15th general election ended in the ruling party's victory, just as you predicted," Chairman Park remarked.
Seok-won responded calmly, "The opposition failed to unite and ended up splitting the votes, so the outcome was inevitable. Even in Seoul, which has traditionally leaned toward the opposition, they only managed to secure 18 seats, while the ruling party swept the remaining 27. That says it all."
At this, Gil Sung-ho, the chief secretary, smoothly interjected,
"That's right. In most contested districts, the Democratic People's Party and the New Era National Conference came in second and third place, while the ruling party won by a narrow margin. It clearly proves that the opposition collapsed due to its failure to consolidate."
"With this result, President Kim Sung-kyu, whose influence had wavered after losing the last local elections, will regain his footing," Park Jin-hyung added.
Chairman Park crossed one leg over the other and nodded.
"Indeed. That man is truly remarkable. He always seems to be teetering on the edge, yet he somehow pulls through every crisis. He's got both luck and skill on his side."
He then turned his gaze to Seo Jin-hyung, the finance director, who was seated beside Gil Sung-ho.
"We may be caught up in this stock battle, but now, more than ever, we shouldn't neglect sending our congratulations."
Seo Jin-hyung, as if anticipating the order, promptly responded,
"We've already prepared ₩1 billion per winning candidate, totaling ₩14 billion."
"That should be sufficient as a goodwill gesture," Chairman Park remarked.
Gil Sung-ho and Park Jin-hyung chimed in approvingly.
"Considering the recent slush fund scandals involving two former presidents, this is neither too little nor excessive—it's an appropriate amount."
"I agree," Park Jin-hyung added.
With consensus reached, Chairman Park gave a slight nod.
"Then, Gil, take care of delivering the congratulatory funds to the ruling party's lawmakers. Make sure it's handled discreetly to avoid any complications."
"Of course. You needn't worry."
Chairman Park took a sip of his coffee before setting the cup down. This time, he turned to Seok-won.
"That aside, today is the deadline for the tender offer proposed by the other party. How is the Mido Department Store situation progressing?"
Seok-won, maintaining his composed demeanor, responded—
"I've acquired the entire 3.2% stake in Mido Department Store held by Chairman Chun of Myeong-dong at 50,000 won per share."
"Is that true?"
Chairman Park Tae-hong, who had been leaning back, sat up straight in surprise.
"That old fox sold his department store shares at a lower price than what Donghae Group offered in their tender bid?"
Finding it hard to believe, he asked again. Seok-won simply nodded, unfazed.
"Yes."
"Ha!"
Chairman Park let out a short breath of astonishment, his eyes gleaming with admiration.
"How on earth did you convince Chairman Chun?"
His older brother, President Park Jin-hyung, along with the other two men, also looked at him curiously.
With a faint smile at the corner of his lips, Seok-won replied,
"It wasn't much. I just made a little bet with him."
"A bet? What kind of bet?"
"Nothing significant enough for you to be concerned about."
Seok-won responded casually, making it seem like a trivial matter.
If Chairman Park knew that he had wagered a 100-billion-won bet on Hanse Group's bankruptcy, he would probably have fallen out of his chair. So Seok-won intentionally glossed over the details.
Chairman Park sensed that Seok-won was keeping something from him, but rather than press further, he narrowed his eyes and simply observed.
"So, with the newly acquired shares from Chairman Chun, that brings our stake to 31.2%?"
Park Jin-hyung murmured, as if calculating.
Seok-won added,
"We've also been quietly purchasing shares in the open market to mislead the opposition. Factoring those in, our stake is around 31.5%. If we include allied holdings, we're looking at roughly 35%."
Chairman Park folded his arms, his expression stiffening slightly.
"We've managed to increase our stake significantly, but it's still not enough to feel secure."
"Given the rumors circulating about our group's financial struggles, more individual investors are selling their shares to Donghae Group's tender offer. That's why we can't let our guard down."
"How much of the stock has been tendered so far?"
"We'll only know for sure once the market closes today, but I estimate that about 10 to 20% of the shares have been tendered."
At this, Finance Director Seo Jin-hyung couldn't hide his unease and interjected.
"Donghae Group must have also purchased additional shares on the open market. If we factor that in, wouldn't they end up holding more shares than us?"
"That's likely."
Seok-won's calm response only deepened Seo Jin-hyung's anxiety.
If the opposition convened an extraordinary shareholders' meeting and replaced the management, they would lose Mido Department Store entirely.
He knew there was a plan in place to turn things around, but that didn't stop him from feeling uneasy.
Sensing his concern, Chairman Park Tae-hong spoke in a low, serious tone.
"I know you're deliberately letting Donghae Group acquire shares, but if you let the rice sit too long, it'll burn."
Acknowledging the warning, Seok-won gave a slight nod.
"That's why we plan to release an announcement before the afternoon trading session starts—Mido Department Store will be selling its textile business shares to a venture capital firm."
"Donghae Group will undoubtedly raise legal objections and try to block the sale. How do you plan to handle that?"
Seok-won responded confidently.
"As you said, they'll object. But based on our legal review, as long as the sale is framed as securing funds for defending management control, there won't be any legal grounds to stop it."
Chairman Park still looked serious despite Seok-won's thorough answers.
"Even so, if the textile business shares are sold, their plan to take over the entire group through the department store will fall apart. They'll do everything they can to stop it."
Secretary-General Gil Seong-ho added in a grave tone,
"Once the announcement goes out, Donghae Group will definitely file an injunction to prevent the sale."
President Park Jin-hyung and Finance Director Seo Jin-hyung both nodded in agreement.
"They won't sit back and do nothing. But when they see the second announcement being released simultaneously, they won't be able to focus solely on Mido Department Store."
Chairman Park's eyes gleamed as he leaned forward.
"Are you planning to drop the Donghae Oil bombshell at the same time?"
Excited by the thought, he spoke in a slightly elated tone, to which Seok-won responded with a mischievous grin.
"If you want maximum impact, it's best to hit all at once and leave them no time to recover."
"Exactly. A series of timed attacks can be effective, but a well-placed combination of heavy blows can send the opponent straight into a knockout."
President Park Jin-hyung smirked in anticipation.
"They think they're cornering us, but when they realize they've walked into an ambush, they'll be in complete disarray. Just imagining their reaction is already satisfying."
"Their heads will be spinning."
Even the usually reserved Secretary-General Gil Seong-ho seemed to share the excitement.
Feeling somewhat reassured, Chairman Park asked,
"How much Donghae Oil stock have we acquired so far?"
"Over the past few days, we've quietly purchased another 0.5% on the open market, bringing our total stake to 18%."
Chairman Park tapped the armrest of his sofa, expressing his frustration.
"I understand that we had to buy discreetly to avoid detection, but while this may shake them up, it's not quite enough to deliver a fatal blow."
"We're not aiming for a hostile takeover of Donghae Group anyway. This is more than enough to pose a serious threat. And now that we no longer need to keep our moves hidden, once we release the public disclosure, we can deploy our cash reserves to aggressively buy up shares. That will push our stake up rapidly."
"Hmm."
Chairman Park pondered for a moment before raising an eyebrow.
"Since we've come this far, why not just go all the way and take over Donghae Group? Chairman Woo was the one who started this fight, so we'd have a legitimate reason."
Donghae Group, the top player in the cooking oil and animal feed industry, also had a strong foothold in finance, with its securities firm, trust company, and credit savings bank. It was a highly attractive mid-sized conglomerate.
"If it weren't for the looming IMF crisis..."
With the massive investment already sunk into the new Gangnam branch and the additional spending required to defend management control, their financial state was already at its worst. Going after Donghae Group on top of that would be a shortcut to disaster.
"That's absolutely out of the question."
Seok-won immediately shot down the idea, his expression hardening.
Chairman Park frowned at his firm stance, but before he could argue, President Park Jin-hyung stepped in.
"Chairman Woo's stake is at 27.6%, which is significant. But given how much they've spent acquiring Mido Department Store shares, they must have exhausted a considerable amount of their liquidity. If we strike now by aggressively buying Donghae Oil shares, isn't there a real chance we could pull it off?"
Seok-won let out an inward sigh before answering in a firm voice.
"It might be possible. But then what?"
His older brother, President Park Jin-hyung, along with Chairman Park Tae-hong and the others, fell silent, unable to respond right away.
Pressing his fingers to his temple in frustration, Seok-won spoke with conviction.
"You all know that we've already halted every planned business expansion, including the Chinese factory, and scraped together every last cent just to fight this battle. Even if we win, it'll take a long time to recover from the damage. If we get greedy for Donghae Group now, the bleeding will only get worse. And even if, by some stroke of luck, we manage to swallow it whole, we won't be able to digest it properly—it'll ruin us in the end."
Secretary-General Gil Seong-ho glanced at Chairman Park before cautiously siding with Seok-won.
"The young master is right. As much as it pains me to say, the timing isn't in our favor. We should focus on finishing this fight properly and strengthening the group's foundations first."
"I agree. I apologize for speaking bluntly, but we simply don't have the resources to take on Donghae Group right now."
Seo Jin-hyung, the finance director who had turned pale at Chairman Park's suggestion but had since regained his composure, also voiced his agreement.
As the person most aware of the company's depleted financial reserves, he must have been desperate to shut down the idea.
With not only his second son but also two key executives opposing him, Chairman Park smacked his lips, clearly reluctant to let go of his ambition.
But he wasn't oblivious to the group's dire financial state. In the end, he chose to back down rather than push forward stubbornly.
"Thinking about it again, I was being too greedy. Forget I ever said that."
Seok-won, who had secretly worried that his father might insist on forcing his way through, finally let out a breath of relief.
"At least he knows when to draw the line. That's a relief."
Trying to console him, Seok-won offered reassuring words.
"If we exercise patience and wait for the right moment, a far greater opportunity to elevate the group will come our way."
"I hope you're right."
Seok-won smiled confidently.
"It will happen. I'm sure of it."
If they could wrap up the battle for control quickly and stabilize their financial situation, they'd be in a prime position to capitalize on the upcoming IMF crisis. When the economic downturn crushed countless conglomerates, they could swoop in and acquire valuable companies at a bargain, massively expanding their corporate empire.
"There's an enormous buffet waiting for us just ahead. Throwing away that chance over something as insignificant as Donghae Group would be utterly foolish."
With that thought, Seok-won let a leisurely smile spread across his face.