Kim Jae-jun, the President of the New Era National Council, returned to Seoul after completing a ten-day campaign trail that started in Gyeongsang Province and passed through Jeolla, Chungcheong, and Gyeonggi Provinces.
Looking visibly exhausted, he was handed a document by Secretary-General Woo Chun-il. As he scanned it, his eyes widened in shock.
"Is this for real?"
When he looked up, Woo Chun-il, seated on the sofa to his left, answered with a grave expression.
"Yes. The foreign exchange reserves have once again fallen below 10 billion dollars, and the outflow of dollars hasn't stopped. If this continues, they say the country may have to declare bankruptcy before the presidential election."
Parched, Kim Jae-jun grabbed the glass in front of him and gulped down the water. With a furious tone, he gritted his teeth.
"What the hell have the Blue House and the government been doing to let things reach this point?"
Facing his outburst, Secretary-General Woo replied calmly.
"It seems that the recent downgrade by international credit rating agencies and the Bank's failed bond issuance had a significant impact. Additionally, instability in Japan's financial markets is further accelerating the dollar outflow."
Though the presidential candidates' flip-flopping—demanding renegotiations with the IMF after having agreed to the terms—also contributed to worsening the situation, Woo chose not to bring that up.
"Hmph."
Letting out a low groan, Kim Jae-jun crossed his arms and asked,
"So, what exactly are they asking me to do?"
Woo Chun-il leaned forward slightly and cautiously spoke.
"They're asking you to withdraw your statement about renegotiating the IMF deal after being elected."
Kim Jae-jun immediately frowned.
"The terms of the agreement are far harsher than those given to Thailand or Mexico, and some even infringe on our economic sovereignty. How could they expect me to just let that go?"
His voice rising, Kim continued firmly.
"If the negotiations had been properly handled from the start, we wouldn't even be having this conversation!"
Despite Kim's anger, Woo tried to persuade him without provoking his temper.
"You're absolutely right. But if the foreign reserves completely dry up, the already struggling economy might collapse to the point where recovery becomes impossible."
"…"
"If that happens, the next administration might spend its entire term doing nothing but damage control."
Normally, Kim Jae-jun would have stubbornly stuck to his stance. But with the IMF crisis causing the ruling Gongjeong Party's approval ratings to plummet, and a real possibility of regime change appearing for the first time, he wavered.
"I understand the desire to ease the people's suffering, but we need to overcome the immediate crisis first. Otherwise, there won't be a next step."
After a moment of contemplation, Kim looked directly at Woo and asked,
"Do you really think this isn't just a scare tactic to get their way, but a genuinely dangerous situation?"
Woo nodded solemnly.
"Yes, I truly believe so. The economic experts in our campaign team said it's unlikely we'll even make it to the end of the year at this rate."
"Well, given how bad public sentiment already is, there's no reason they'd risk revealing this kind of urgency unless the situation was truly critical."
With no more room for doubt, Kim Jae-jun let out a reluctant sigh.
"It's unfortunate, but we have no choice. Tell them I'll withdraw my call for renegotiation—on the condition that the other candidates do the same."
"Of course."
Secretary-General Woo Chun-il responded quickly with a look of relief.
"Then I'll relay your message to the Ministry of Finance right away."
"Hmm."
Kim Jae-jun gave a small nod and leaned back in his chair, visibly exhausted.
Then, as if a thought suddenly came to him, a bitter smile crossed his face.
"When President Park warned about the foreign exchange crisis back then, I thought he was just being overly cautious. But it ended up happening exactly as he said."
"Indeed," Woo agreed, his expression tinged with regret.
"I can't help but think that if we had taken a closer look and acted seriously back then, maybe things wouldn't have gotten this bad."
"I feel the same way."
Resting briefly against the sofa cushion, Kim Jae-jun spoke again.
"Was it the Eldorado Fund? The one that recently acquired Hansung and Ilhan Bank—wasn't President Park the owner?"
"Yes, that's correct. And not only that—he also bought foreign bonds worth a whopping 9 billion dollars, which apparently gave the Finance Ministry some breathing room even before negotiations with the IMF began."
"He's still young, yet he's managed to achieve that much on his own. Truly an exceptional talent."
"I completely agree. I've come to see President Park in a whole new light after this."
"Now that the chances of winning the election have increased, everyone's lining up to offer donations. But back when times were hardest, the only one who gave us consistent support was President Park."
Kim Jae-jun stopped tapping his hand on the armrest and said quietly,
"Once the election is over, let's arrange a proper meeting to thank him in person."
"I'll take care of it."
***
[Ruling and Opposition Presidential Candidates Withdraw Demands to Renegotiate IMF Deal]
[Market Interest Rates Soar to 30% Annually, Causing a Corporate Funding Crisis]
[Credit Rating Downgrade Triggers Currency Spike—Won Nears 1,700 per Dollar]
[Washington Post: Korea Faces Shortfall of At Least $2.4 Billion in Foreign Currency by Year-End Without New Inflows]
[Next Year's External Debt Expected to Rise to $126.8 Billion]
[Bankruptcy Fears Spur Panic in Stock and Foreign Exchange Markets]
Seok-won sat at a wide desk, skimming the newspaper headlines sprawled across the front page.
His eyes paused on the headline announcing that both ruling and opposition presidential candidates had withdrawn their calls to renegotiate with the IMF. He clicked his tongue briefly.
"Tsk. It's a relief they've reversed course, but the timing is far too late."
Although they were belatedly attempting to restore confidence, the damage had already been done.
By flip-flopping on a signed agreement as easily as flipping a hand, Korea's political class had lost credibility not just with the IMF and international financial institutions, but also with global investors.
As a result, foreign financial institutions that had loaned money to Korea began pulling out their funds to minimize risk, signalling they wouldn't reinvest until the presidential election concluded and political uncertainty cleared.
"It just so happens that I'd bought the foreign exchange stabilization bonds, and the IMF support funds are coming in now—it's the perfect time for them to withdraw."
In effect, every dollar flowing into the Bank of Korea was being sucked right back out by foreign institutions and investors, making the forex situation worse than it had been even before the IMF bailout talks.
Seok-won lowered the newspaper and muttered coldly,
"Now that trust is already in ruins, claiming to uphold the IMF agreement is like locking the barn after the horse is gone."
Just then, the phone on the corner of his desk began to vibrate.
Seok-won glanced at the number on the screen and answered immediately.
[It's me.]
As always, Lee Chul-gyun's deep voice came through.
"What is it?"
[Seonam Securities is applying for court receivership this afternoon and will cease operations.]
"...!"
The moment he heard the news, Seok-won's expression stiffened.
However, he quickly regained his composure and leaned back in his chair as he spoke.
"After Shilla Securities collapsed, there were serious concerns about customer withdrawals. Looks like they finally reached the breaking point."
His calm tone prompted a slightly curious question from Lee Chul-gyun on the other end of the line.
[You sound like you saw this coming.]
Seok-won responded matter-of-factly with the phone still to his ear.
"I told you before—rumors about their worsening finances spread, then talk of a sale emerged. That sparked a bank run. It's been reported they've been bleeding about 20 billion won a day in customer deposits."
[That's true.]
"No matter how large a securities firm is—even one ranked fourth in the industry—it can't survive continuous, large-scale withdrawals like that."
[You're absolutely right.]
They had desperately tried to secure enough liquidity by selling off their financial assets at fire-sale prices, but even that had its limits.
To make matters worse, banks took heavy hits when other investment companies were suspended, and market liquidity dried up. That made even short-term borrowing practically impossible.
"The sale card they played as a last resort just ended up accelerating their collapse."
In fact, negotiations with a conglomerate had progressed so far that people expected an acquisition announcement soon.
But after watching Shilla Securities go under, investors panicked. Fearing they might not be able to retrieve their deposits, they scrambled to withdraw all their funds from Seonam Securities.
No matter how much Seonam insisted there would be no problems returning deposits, those reassurances couldn't reach the ears of investors consumed by fear.
With a bitter expression, Seok-won remarked,
"If Seonam Securities enters court receivership, the parent company, Dongbuk Construction, won't escape unscathed either."
[They've been propping themselves up through Seonam—securing funds using tricks like deposit pledges and guaranteed promissory notes. A domino default can't be ruled out.]
"I agree."
With their financial pipeline cut off, Dongbuk Construction's collapse was only a matter of time.
"If anything else comes up, let me know right away."
[Understood.]
With a short reply, Lee Chul-gyun hung up.
Setting the phone down, Seok-won lightly tapped his desk with his fingertips and murmured in a low voice,
"The market was already on edge. With Seonam Securities shutting down too, the shockwaves will be massive."
***
The next day.
News broke through the media that Seonam Securities had officially suspended operations and filed for court receivership.
As dawn broke, panicked customers rushed to their local branches. Upon seeing the notice posted on the customer hall doors, they were left in stunned disbelief.
Notice Regarding Suspension of Operations
Due to worsening financial conditions, we regret to inform you that customer hall operations will be suspended temporarily to facilitate business normalization.
We deeply apologize to our valued customers who have trusted and transacted with Seonam Securities over the years.
While we have filed for court receivership concerning liabilities other than client assets, please rest assured that your entrusted funds remain safely protected...
"What the hell is this? Out of nowhere, they're shutting down?"
A man in a grimy work jumper furiously shook the metal shutter that had been firmly pulled down.
Next to him, a middle-aged man in a tie pressed up against the shutter, shouting with a desperate face.
"My entire life savings are in there! What happens to my money now?!"
"Oh no... Oh god!"
An elderly market vendor woman with white hair collapsed to the ground, wailing loudly.
"You don't know what I went through to save that money! You bastards, give me back my money!"
As the commotion grew louder, employees of Seonam Securities finally came outside and tried to calm the agitated customers.
"Everyone! As the notice says, your deposits are safe, so there's no need to panic!"
"Please calm down and listen to what we have to say!"
"Once the court receivership process is in place, we expect to resume operations soon!"
Despite their desperate attempts to reassure the crowd, it was all in vain.
Instead, furious customers grabbed staff by the collar or pointed fingers in their faces, causing an escalating confrontation.
"You said there was no way the company would shut down—how are we supposed to trust you now?"
"Forget the explanations—just give me back my money!"
"Don't just talk! If you're serious, give us a written guarantee of principal protection!"
As voices rose and some customers tried to force their way inside while staff blocked them, the situation quickly spiraled out of control, leading to the arrival of the police after emergency calls were made.
This exact same chaos played out not only at the Yeouido headquarters branch but also across all 82 Seonam Securities branches nationwide.