Monday morning, June 16, 1997.
President Park Jin-hyung of Daeheung Textile had just arrived at the office and was sitting at his desk as usual when his close aide, Chief Secretary Oh In-hwan, knocked and hurried in.
"Sir, Taehwa Shopping has just issued an announcement that they've filed for court receivership."
At the unexpected news, President Park frowned and straightened his back.
"Is that true?"
"Yes. They made the disclosure to the stock exchange, and trading of their shares was suspended immediately."
"Hm."
Taehwa Shopping was a prominent local department store in Busan, with annual sales of 140 billion won and 650 employees.
Among regional department stores, it was one of the largest and most valuable brands. Hearing that such a company had filed for court receivership overnight was nothing short of shocking.
"They say worsening financial conditions caused by rising debt and interest payments were the main reasons. It seems their debt surged after spending 80 billion won on a new annex last year and pushing too aggressively to open a second location in Buk-gu, Busan."
"There were rumors of bankruptcy floating around for months, but I didn't think it would come to this."
President Park, now wearing a stiff expression, reached out and picked up the phone receiver.
[It's me.]
As the call connected, the deep voice of Chairman Park Tae-hong came through.
"Have you heard the news about Taehwa Shopping?"
[Yes. I was just about to call you. This is good timing. I've called President Min—come as well.]
"Yes, I'll head over right away."
President Park immediately hung up.
As he rose from his chair, Secretary Oh asked,
"Did the Chairman ask for you?"
"Yes."
With a brief reply, President Park took his jacket from the coat rack and draped it over his arm.
When he arrived at the chairman's office, Chief Secretary Gil Seong-ho and President Min Pil-gi of Mido Department Store were already there, seated on either side of Chairman Park Tae-hong.
Chairman Park, a cigarette between his lips, turned to his eldest son and spoke in a low voice.
"Have a seat."
"Yes, sir."
President Park quickly gauged the mood and sat beside President Min.
Chairman Park exhaled a stream of white smoke, then gave a nod toward President Min.
"Go on."
With a stiff expression, President Min resumed.
"As I mentioned, after Lotte and Hyunwoo Department Stores entered the market one after the other, competition intensified. Taehwa Shopping, which had all but monopolized Busan, saw a sharp drop in sales and ended up posting a 14.6 billion won deficit last year."
"With those three conglomerate department stores expanding so aggressively, it's hard enough for us to hold out—much less the smaller local ones."
"They borrowed over 100 billion won to build the annex and open a second branch in a bid to stay competitive. But after Hanbo Group's bankruptcy, the banks started demanding early repayment, and Taehwa couldn't hold on any longer. That's what led them to file for court receivership."
Chairman Park stubbed out the last of his cigarette in a crystal ashtray, sighing softly.
"To think they got to that point because they couldn't even manage 1.8 billion won in monthly interest payments…"
It was a shocking development, but at the same time, Chairman Park Tae-hong couldn't help but feel a chill run through him—after all, he himself had once tried to take on the conglomerate department stores by recklessly leveraging debt to build a massive Gangnam branch.
'If I hadn't listened to Seok-won and had pushed ahead with the Gangnam project as planned, we might have collapsed even before Taehwa Shopping did.'
To make matters worse, he had also considered expanding the factory in China. There was no way they would have withstood the current liquidity crisis had they gone through with it.
Since Hanbo Group's bankruptcy, companies big and small had been collapsing one after another. But because Taehwa Shopping was also a department store-centered enterprise, its filing for court receivership hit especially close to home.
Looking grim, Chairman Park took out a fresh cigarette, lit it with his desk lighter, and muttered quietly,
"This doesn't feel like someone else's problem."
Chief Secretary Gil Seong-ho, glancing at President Park Jin-hyung across from him, spoke cautiously.
"If we hadn't taken Seok-won's advice and extended our loan maturities and tightened operations, we could've been in real trouble too."
"You're right. We might not even be sitting here now."
Gil Seong-ho had worried that President Park might feel some jealousy, but there was no such sign from him.
"Given how tight liquidity is likely to remain for a while, perhaps we should consider selling off the idle Cheongju cotton-spinning plant, even if it means taking a small loss."
The cotton mill in Cheongju, now closed after the production was moved entirely to China, was a symbolic site—it had laid the foundation for Daeheung's rise into a major business group.
Because of that, they had held onto it until the end, even while liquidating many other idle assets as part of their austerity measures.
"I'd be lying if I said I wasn't attached to it, but it's probably the right move."
Chairman Park smacked his lips and turned to Secretary Gil.
"Didn't Daekwang Group express interest in the Cheongju plant?"
"They did, but their proposed purchase price was too low for us to even begin negotiations."
"They offered 21 billion won, right?"
"Yes, that's correct."
Chairman Park frowned slightly.
"Even for a regional property, the land value alone should be more than that. That's a real lowball offer."
The site was 127,000 pyeong, so the offer amounted to just over 160,000 won per pyeong.
After a brief pause, Chairman Park made his decision.
"Right now, securing cash is more important—even if it means taking a minor loss."
There's no point in clinging to everything just because it holds sentimental value.
"Contact Daekwang Group. Ask if they're still interested in the purchase, and proceed with the sale."
"Understood."
Chairman Park flicked the ash from his cigarette into the crystal ashtray, then turned his attention to Min Pil-gi, president of Mido Department Store.
"We're not going to have any cash flow problems, are we?"
President Min Pil-gi immediately responded.
"Yes. Although sales have dropped recently due to the poor economy, since we're no longer spending money to support affiliates, we still have some financial leeway."
That implied things would have been difficult if they hadn't slimmed down the company through restructuring in advance. Chairman Park Tae-hong once again admired Seok-won's foresight.
Still, he refrained from openly praising him in front of his eldest—doing so would've been tactless—so he kept a neutral tone.
"We don't know when or how the fallout from Hanbo Group's bankruptcy might hit us. Focus more on securing cash and try to reduce inventory as much as possible through sales."
"Understood."
Chairman Park then shifted his gaze to his eldest son.
"You said the mayor of Shenyang keeps pushing to know when the factory expansion will start, right?"
"Yes. Not just the mayor—even Wei Zhizhong keeps calling, saying that if we don't start construction soon, the promised incentives may be withdrawn. It's a subtle form of pressure."
"They're desperate for results, I'm sure. But we're in a tight spot ourselves, so we can't afford to worry about their situation. Still, since we'll be doing business in China in the future, it's best not to sour the relationship. Try to smooth things over with some plausible excuse."
"Will do."
Although Seok-won had an outstanding eye for investment and insight, Park Jin-hyung also had a steady, reliable management style that didn't fall short of others.
Chairman Park looked at his eldest son with a reassuring gaze and smiled inwardly with satisfaction.
***
When Choi Ho-geun entered the room, Seok-won closed the report he was reading and stood up.
Then, with a gesture of his chin toward the sofa, he indicated for Choi to sit rather than stand.
"Come on in."
After a slight bow, Choi Ho-geun walked over and sat on the sofa. Seok-won asked,
"What would you like to drink?"
"I'm fine."
Upon hearing that, Seok-won gave a small wave, and Na Seong-mi, who was standing by the door, quietly stepped out.
Crossing one leg over the other, Seok-won sat in the center seat of the sofa and asked,
"So, what brings you here?"
Choi placed the file folder he brought in front of them and, looking satisfied, replied,
"The short-selling settlements against Japan's four major securities firms have all been completed."
Eyes sparkling, Seok-won straightened up with an expectant expression.
"Really? Judging by that expression, I take it the returns weren't bad."
Receiving the attention, Choi Ho-geun confidently squared his shoulders.
"You won't be disappointed."
"That only makes me more curious."
As Seok-won opened the file to check its contents, Choi began to explain.
"As written inside, the combined return across the four stocks was 43%, earning a total of 23.4475 billion yen. After deducting taxes and other costs, the final profit came to 22.513 billion yen."
Seok-won looked up and said,
"That's roughly 177.26 million dollars when converted to USD."
"Yes, that's correct."
A satisfied smile spread across Seok-won's face.
"Good work."
"We just followed your lead. You laid out the table, and we merely picked up the spoon."
At the humble response, Seok-won replied with a gentle tone,
"Sure, I laid the groundwork—but it was your effort and your team's work that maximized the returns."
"Thank you for saying that."
Seok-won closed the file and leaned back in his chair.
"Before the yen weakens any further, convert the principal and profits to U.S. dollars and transfer the entire amount to the account we set up in the Cayman Islands."
Choi Ho-geun's eyes widened as he asked,
"Do you think the aftershock of the Southeast Asian currency crisis will reach Japan too?"
With a shrug, Seok-won replied as if it were obvious,
"The yen may be considered a safe asset, along with the dollar and gold, but Japan has the largest exposure to Southeast Asia in terms of investment. So this time, it's unlikely the yen can avoid taking a hit."
"Now that you mention it, that does make sense."
Seok-won gave a small grin.
"Of course, that doesn't mean Japan is going to get hammered by hedge funds like Thailand or Indonesia. Japan's economy is simply too large, and its foreign currency reserves are massive."
Choi nodded in agreement.
"Then it's probably going to be hard for the Nikkei to bounce back anytime soon."
"Until the currency crisis settles down, that's very likely."
Resting his clasped hands on his knee, Seok-won continued,
"Malaysia's stock market is plunging too—just like the ringgit. It keeps falling with no bottom in sight."
"It's long since fallen below 650, and now the 500 mark is at risk. If I had known, I would've pushed harder to sell more futures. It's a bit frustrating."
Seeing Choi click his tongue with regret, Seok-won chuckled.
"Well, at least you made a solid profit shorting Japan's big four securities firms."
"That's true."
"I'll make sure you're rewarded properly later. I know it's tough, but hang in there until this plays out."
Choi responded with enthusiasm, as if the idea of being told to stop was unthinkable.
"This is the kind of once-in-a-lifetime opportunity traders dream of. Even if you told me to leave, I'd cling to your leg and beg to stay until the end."
"Haha, don't worry. I won't be telling you to leave anytime soon."
Seok-won laughed heartily, then suddenly remembered something and held out his palm.
"Ah, wait just a moment."
He stood, walked over to his desk, pulled something out of his wallet, and came back.
"Here—treat everyone to a dinner tonight."
Choi's eyes widened when he saw the two 1-million-won checks.
"This is too much. Even if we go all out on premium Korean beef, there'll still be money left."
"Then use the rest for taxi fare or split it up. You've all worked hard—at least go fill your bellies."
With Seok-won brushing it off casually, Choi stopped declining and accepted the checks.
"In that case, thank you. We'll enjoy it well."