Chapter 14: CH14
Headquarters of Daeheung Group, Mapo, Seoul, South Korea
Upon arriving at the office, Chairman Park Tae-hong handed his jacket to his secretary. He then turned to Secretary General Gil Seong-ho, who had followed him in.
"Did you see the article in this morning's paper?"
"Are you referring to the UK government's sudden withdrawal from the ERM?"
"Yes."
Chairman Park nodded slightly and sat down on the antique sofa in his office.
"Who would have thought that the mighty UK would crumble so easily under the attack of global hedge funds?"
Gil Seong-ho, who had taken a seat to Park's right, responded.
"I also thought the situation was serious, but I never expected this outcome."
"Everyone probably thought the same."
In fact, even after seeing Wall Street mogul Soros publicly target the pound and the global hedge funds joining the attack, most believed that the Bank of England would prevail.
The UK government and Bank of England Governor Arthur had confidently declared, even that morning, that there would be no devaluation of the pound, let alone a withdrawal from the ERM.
But in less than a day, everything had turned upside down.
The secretary, who had hung up Chairman Park's jacket, asked,
"Shall I prepare some tea for you?"
"Yes, make it sweet with coffee."
"Right away."
Chairman Park Tae-hong had a taste for a traditional coffee shop style—coffee with plenty of sugar and cream. Knowing his preferences well, the secretary nodded slightly and left the room.
Leaning back into the plush sofa, Chairman Park asked, "What's the pound trading at now?"
Knowing that Chairman Park would ask about it as soon as he arrived at the office, Gil Seong-ho had already checked the exchange rate. He immediately replied, "After continuing to decline in the Asian forex market following the U.S., the pound is currently fluctuating around $1.29."
"And what was the price when my second son invested in the pound?"
"It was $1.43 per pound."
"So, how much has he made from this?"
"His return is about 9% so far, so if he invested all of his winnings, that would be about $10.8 million in profit."
"Huh."
Chairman Park let out a small chuckle in disbelief, then looked at Secretary Gil and said, "Secretary Gil."
"Yes, Chairman?"
"Last month, Mido Department Store's net profit was around 40 billion won, wasn't it?"
"That's correct."
"But my son made in less than a month the equivalent of one-fifth of our group's main affiliate's monthly net profit. Can you believe that?"
His tone was a mixture of admiration and pride, with a hint of bragging.
"He's truly remarkable. It seems the second son has inherited your talent for investing."
In reality, with the leverage he used, he had made far more than they both expected. If they knew how much he had really earned, they wouldn't be able to close their mouths in astonishment.
"I was puzzled when I first heard that he had invested such a large sum in the pound, but now it seems he may have foreseen this and made a calculated bet."
Secretary Gil privately thought the same. Of course, there was a certain sense of pride in Park Tae-hong's gaze as he subtly bragged about his son, which prompted Secretary Gil's instincts from years of social experience to kick in.
"I agree. As a Harvard business student, the second son likely saw something we missed and acted on it first."
This was exactly what Chairman Park wanted to hear, and his face lit up with satisfaction.
"Right, that must be it. He's definitely my son! That kid was always sharp and quick-witted from a young age. Getting into Harvard, which is notoriously difficult, speaks for itself."
With a warm smile on his face, Chairman Park nodded in agreement.
"When he told me he was betting on the pound, I knew something was up. He's not the type to blow such a large sum without a plan. It was all part of his strategy."
As Secretary Gil listened quietly, he had to suppress a feeling of disbelief.
He clearly remembered Chairman Park being furious when he received the report from Managing Director Son Dong-seong at the U.S. branch right in this office. What plan was he talking about?
"No matter how confident you are, it takes guts to throw over $100 million in one go. That kid's got guts, just like me. And he's got the drive to push through when he sees an opportunity. Don't you think so?"
Chairman Park laughed, perhaps boasting about his son or maybe himself, and looked at Secretary Gil with a gaze that held a subtle pressure.
'Didn't he say something completely different last time?'
A retort almost slipped out, but years of corporate survival instincts had trained Secretary Gil's mouth to move on its own.
"Yes, you're right. The first son is reliable, and the second son is smart. They both resemble you greatly. There's a reason they say you can't hide your bloodline."
"Haha, isn't that so?"
Chairman Park laughed heartily, clearly pleased with Secretary Gil's natural agreement.
As a warm atmosphere filled the room, the secretary returned with the coffee and placed it in front of Chairman Park before leaving again.
Chairman Park picked up the coffee cup, took a sip of the sweet brew, and set it down, saying, "It seems my second son has a talent for finance. What do you think?"
Realizing that this was not just a casual question, Secretary Gil carefully chose his words while watching Chairman Park's reaction. "It's still early to say, but he certainly seems to have a knack for it."
"Judging by one thing, you can see a lot. He definitely shows promise."
Chairman Park leaned back in his chair again.
"He'll be graduating soon, so when he returns to Korea, I should have him work in finance."
"But we don't have any financial companies within our group. Are you considering sending him to another company to gain experience?"
"No, that won't do."
"Then…"
Chairman Park's expression became more serious as he clasped his hands together and spoke with weight.
"Our group has now risen to 30th in the corporate rankings, so isn't it time we had at least one financial company?"
Secretary Gil was taken aback by this unexpected statement.
"Are you planning to acquire a financial company?"
"Yes."
Chairman Park nodded and spoke calmly.
"With the influx of foreign investment, the stock market is booming these days."
Since January, the government has been promoting financial market advancement and has partially opened the stock market, which had previously been restricted.
Although there was a cap set at 10% of the total issued shares of listed companies, the new influx of foreign investment had caused stocks to surge, leading to a bull market.
"As you said, many predict that the stock market will surpass 1,000 points within a few years, so the market is looking very favorable."
With the KOSPI currently fluctuating around the 600-point range, a jump to 1,000 points would nearly double its value.
"Looking at the current market conditions, that prediction doesn't seem far-fetched."
Chairman Park turned to Secretary Gil and continued, "There's talk that the bond market will also partially open the year after next. If that happens, the financial market will grow three or four times larger than it is now. In other words, there will be plenty of opportunities to make money."
"Indeed. Foreign investors entering the market means that capital will be abundant."
Secretary Gil agreed.
"Exactly. There's a golden opportunity to make big money right in front of us, and only a fool would sit by and do nothing."
"You're absolutely right."
"And with our group's main business in textiles seeing declining profit margins, we need to find new growth opportunities quickly, aside from the department stores."
Daheung Group had grown significantly through its textile business, but with changes in both the domestic and international environment, it was hitting a ceiling.
To diversify, the group had acquired several companies, but apart from the department stores, they had yet to see significant success.
In this situation, entering the financial sector could provide a breakthrough. Knowing the internal state of the group better than anyone, Secretary Gil nodded in agreement.
"Then I'll look into finding a suitable acquisition."
"The old foxes at the Federation of Korean Industries are probably thinking the same thing, so move quickly before another group makes a move."
"Understood."
With a short reply, Secretary Gil stood up and left the room.
Left alone, Chairman Park picked up the coffee cup in front of him and swallowed the now lukewarm coffee.
Although his doctor repeatedly warned him to start taking better care of his health, he found it hard to give up coffee and cigarettes.
"Coffee has to be sweet, after all."
His doctor had urged him to at least stop adding sugar, but what's the point of drinking coffee if it doesn't taste good?
Come to think of it, his second son always drank his coffee black like a bitter concoction. There must be something wrong with his taste buds.
"Hmm."
Thinking of his second son, Chairman Park rubbed his chin and muttered to himself.
"If he proves to be as capable as I'm hoping, I could hand him a securities firm in the future."
A slight smile appeared on Chairman Park's face as he spoke to himself.
***
Cambridge, Massachusetts, USA
As the sun began to set, Seok-won, seated at what had become his usual spot at the outdoor table, scratched his left ear, which had been itching for a while.
"Someone must be talking about me…"
Furrowing his brow, Seok-won smacked his lips and opened the Wall Street Journal he had just bought.
[
Pound Plummets to Catastrophic Lows!
As of the 18th, the British pound has continued its downward spiral, falling to $1.18.
Experts predict that the downward trend will continue for some time due to the shock of the UK government's ERM exit.
On the 16th, the UK government announced a sudden withdrawal from the ERM, abandoning its policy of pegging the pound at $1.6 per euro.
The devaluation of the pound is expected to lead to a surge in import prices, inflation, and a weakening of export competitiveness.
Meanwhile, global hedge funds, including Soros, who played a decisive role in this crisis, are said to have reaped massive profits from the pound's collapse.]
"At this rate, it'll drop below $1 in no time."
The pound's collapse was faster and steeper than what he had originally known.
"It seems like my involvement had an impact."
All other conditions were the same, but with Seok-won's presence, it was likely that his actions had accelerated the situation.
In reality, his involvement had led Soros's Quantum Fund to inject more capital into the attack on the Bank of England, earlier and more aggressively than in the original timeline.
On top of that, Salomon Brothers, noticing the returns he had generated, poured an additional $10 billion into the pound, driving it even lower.
"As the pound continues to fall, the more these global hedge funds will try to push it down further."
For the struggling British government, this must have felt like hell, a truly infuriating situation.
However, in the cutthroat, Darwinian world of international finance, where even the slightest sign of weakness could lead to a feeding frenzy, it was almost inevitable.
The thought of setting a lower target crossed his mind, but he quickly dismissed it.
"As they say, greed brings misfortune. It's best to stick to the original plan."
Even lowering the target by just a cent could yield at least several hundred thousand dollars in additional profit.
Nevertheless, he was able to let go without hesitation because he was already prepared to hit another jackpot elsewhere.
"Everyone says the UK economy is doomed after the ERM exit, but is that really the case?"
While inflation might rise, the devaluation of the pound would make British exports more competitive, which was actually a positive for struggling exporters.
"Once I liquidate my position and reinvest all the profits back into the UK stock market, it won't be long before they multiply."
Rather than risking everything for a few hundred thousand more by delaying the liquidation of his pound position, it was far wiser to invest in British stocks that were about to soar.
As he chuckled to himself, anticipating the next jackpot, a long shadow fell across the table.
"There you are! I've been looking all over for you."
When Seok-won looked up, he saw Roy standing there, wearing a baseball cap and headphones around his neck.
"What are you doing here?"
Surprised, Seok-won straightened his posture.
Roy, who often skipped classes to hole up in their room, had suddenly shown up here, which was unusual.
"I'm in a rush… Come on, get up."
Roy hurriedly checked his wristwatch, scratching his straw-like, dry hair in irritation before adjusting his baseball cap again.
"What's this about?"
"No time to explain. Just get up!"
Ignoring Seok-won's questions, Roy repeatedly urged him to hurry while grabbing his backpack without asking.
"Come on, get up. We're running out of time!"
Roy grabbed Seok-won by one arm, pulling him up so forcefully that Seok-won stumbled to his feet, still bewildered.
"What's going on?"
"I'll explain on the way, just hurry up!"
Roy shoved a helmet onto Seok-won's head, threw him onto the back of a scooter, and sped off immediately.
Brrrrrr!
"Hey! Where are we going?!"
Caught off guard by the sudden kidnapping, Seok-won shouted from the back.
But Roy either didn't hear him over the engine noise or simply ignored him, continuing to drive the scooter at breakneck speed toward some unknown destination.
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