章節 687: Chapter 687: A Potential Crisis from the Pipeline Deal
News about the construction of oil and gas pipelines between Korea and Russia stirred excitement in the Korean stock market.
Jungwoo Refinery wasn't listed on the stock market.
However, two out of the four major refining companies in Korea were registered on the KOSPI.
After the joint statement between Korea and Russia was announced, all oil-related companies listed on the stock market recorded a 15% drop, hitting the lower limit.
As multiple stocks plummeted, both the KOSPI and KOSDAQ indices fell sharply.
This news sent shockwaves through the securities industry.
— The KOSPI index briefly hit a 7% drop during trading hours. This marks the largest decline for both indices since the dot-com bubble. Next news…
Even after Medvedev completed his visit to South Korea and returned home, the stock prices of oil-related companies continued to fall.
"What on earth is going on here?"
The four major gas companies in Korea had no choice but to hold an emergency meeting.
Chairman Kim Byung-woo of Jungwoo Group, Chairman Song Chan-woo of Daehyeon Group, Chairman Choi Woo-sik of KS Group, and Chairman Yeo Seung-jin of Geumsung Group gathered.
The key players in the industry gathered to begin discussions.
No, calling it a discussion was more suited to describing a hearing aimed at Chairman Kim Byung-woo.
"Chairman Kim Byung-woo. Speak up. Just when did this all start? When did negotiations with Russia begin?"
"I only found out not long ago. There was absolutely no prior contact."
"Do you really think that's a reasonable explanation? This involves exclusive rights to Russian oil entering Korea through pipelines. Are you saying Russia made this unilateral announcement without any prior consultation?"
Chairman Yeo Seung-jin slammed the table, spilling her agitation.
"Someone else, speak up. Am I the only crazy one here? Or did everyone except me know about this situation?"
Chairman Song Chan-woo was equally shocked by the recently announced joint statement.
"I had no idea, Madam Yeo."
Chairman Song's honest response drew a sharp glare from Yeo Seung-jin.
"So, Chairman Song, you didn't know either? After all the close dealings with Jungwoo Group? Ha! Do you think I'm an idiot?!"
"Right now, Daehyeon is concentrating all its resources on the North Korean project so we can't focus on anything else. We just found out about this joint statement too, so let's refrain from jumping to conclusions."
After a long pause, Yeo Seung-jin turned to Chairman Choi Woo-sik.
"What about you, Chairman Choi?"
"I haven't heard anything either."
"Well, you are somewhat preoccupied with the management rights struggle…"
Yeo Seung-jin's thoughts wandered to the state of KS Group.
The management rights struggle of KS Corp, led by private equity firms, was a matter of great concern in the business world.
"That's not what's important right now. Chairman Kim Byung-woo, you need to talk. This is something everyone in this room was unaware of. We've been blindsided, completely!"
Chairman Choi Woo-sik supported Yeo Seung-jin's statement.
"Madam Yeo is absolutely correct. Our four major refineries agreed to cooperate, didn't we? Yet now Jungwoo Refinery is monopolizing all the benefits without consulting with us. Do you really think that's acceptable? This is outright deceit."
In the eyes of all the refineries gathered here, the pipeline construction was welcomed.
With over 80% of the imported oil coming from the Middle East, diversifying supply routes had long been a dream for refineries.
But if someone were to monopolize the resulting profits, that was an entirely different matter.
"We all need to be in this together. A monopoly is unacceptable."
As everyone's attention turned to him, Kim Byung-woo looked flustered.
"But there's nothing I can do about it."
"If the chairman responsible for Jungwoo Group can't do anything, then who can?"
"…Don't you all know? Who the owner of Jungwoo Group is? This is all part of his grand design."
The first to realize who was being referred to was Chairman Choi Woo-sik.
"You're talking about CEO Kim Mu-hyeok?"
"That's right. He's been negotiating with the Russian government for quite some time regarding this pipeline project."
Upon hearing that CEO Kim Mu-hyeok was at the helm, Chairman Choi Woo-sik fell silent.
At this moment, Chairman Choi Woo-sik found himself in no position to confront Kim Mu-hyeok.
"Do you think I want to create uncomfortable relationships with the chairmen gathered here? But it's already been decided. This isn't something I can fix by stepping in."
Chairman Kim Byung-woo lamented his predicament, sounding almost wronged, which caused Yeo Seung-jin to click her tongue.
"Tsk. You're the chairman of Jungwoo Group. Yet you hide behind CEO Kim Mu-hyeok, saying you don't know, and it's not something within your power to change. Are you truly just going to stand there and utter such excuses?"
"This whole project was conducted in secret by CEO Kim Mu-hyeok. He informed me only the day before Medvedev's visit. I'm just as frustrated, but with an agreement already reached between the Russian and Korean governments, we can't simply retract it now."
"So, are we just supposed to accept this? If they supply oil at a low price and engage in price competition, we'll be pushed out of the market."
Yeo Seung-jin wasn't worried about the domestic market.
Due to fuel taxes, price differences couldn't become too significant in the domestic market.
But the export market presented an entirely different matter. Refineries depended on exports for over half their profits.
Geumsung Group was in the midst of restructuring its divisions.
Having stepped down as honorary chairman, Yeo Seung-jin was in the process of reorganizing succession lines through division separation.
'If the value of the refining business drops…'
Starting with the joint venture between the Yeo and Bu families, Geumsung had been a group nurtured by the two families.
However, as the group grew and time passed, the offspring of both families increased, prompting Yeo Seung-jin and Bu Chang-min to prepare for division.
They wished to avoid any disputes arising from inheritance issues.
In the midst of this, Bu Chang-min passed away first, and his son Bu Jin-soo was now leading the Bu family.
Most of the division pertaining to the Yeo family had been completed; only the division for the Bu family remained.
The companies allocated to the Bu family included Geumsung Refinery, Geumsung Construction, and Geumsung Distribution.
With a human division having been completed, Bu Holdings was already established, containing the companies due to be allocated to them.
Although they were all unlisted entities, the news of the pipeline construction caused a state of emergency for Geumsung Refinery as well.
"Chairman Kim."
"Yes, Chairman."
"This time, both the Yeo and Bu families are preparing for a graceful parting. You're aware of that, right?"
"Yes, I am. I've heard that Geumsung Group is proceeding with the separation without any notable disputes or conflicts."
"Correct. The companies that the Bu family will take have already been decided, and now it's just a matter of awaiting approval from the Fair Trade Commission for the separation to proceed. But then this situation suddenly arises."
As if he caught on to what Yeo Seung-jin was hinting at, a perplexed expression appeared on Kim Byung-woo's face.
"Among the companies the Bu family will take, the refining business is the largest. If its value declines, how do you think the separation will proceed smoothly? Had I known, I would have expedited the separation process. If the value of Geumsung Refinery drops while it's still part of Geumsung Group, will the Bu family be satisfied?"
Yeo Seung-jin desired to avoid any disturbances until the separation was finalized.
This was for the sake of the family that would remain after her passing.
"So, have the Jungwoo Group discuss this. Though Jungwoo Refinery holds exclusive rights, say that we need to find a way to share interests with the domestic refineries through negotiations."
Yeo Seung-jin's proposal was something Kim Byung-woo couldn't accept. Kim Byung-woo raised his voice without realizing it.
"That's an unreasonable demand. What company shares profits with another?"
"I'm not saying you should actually share. Just delay it until after the separation is finalized. Can't you agree to just that?"
"Absolutely not. If something goes wrong later, it'll create issues with Bu Jin-soo. I won't entertain that idea."
Kim Byung-woo said decisively. Feeling desperate, Yeo Seung-jin's tone instinctively rose.
"Chairman Kim Byung-woo! It's not a difficult request. You simply need to tell the press that various plans are being discussed!"
At that moment, the door opened, and Kim Mu-hyeok walked in.
"I hear Madam Yeo's voice all the way outside. Why are you so upset, Madam Yeo? Be careful or you might collapse from high blood pressure. At your age, you should be cautious."
With a casual tone, Kim Mu-hyeok's lips curled into a broad smile.
* * *
Hearing that the stakeholders of this project were having a meeting, I set off to join them.
"Our Chairman Kim must be having a rough time."
I had delayed informing Chairman Kim Byung-woo about this situation.
If word got out too early, various sabotage tactics would surely commence, so I had to limit the number of people who were aware of this information.
The domestic refiners, excluding Jungwoo Refinery, had established strategic alliances with foreign oil companies.
While it was possible to quell domestic backlash, if foreign oil companies got involved, even I would find it challenging.
Geumsung Refinery's 50% stake was owned by Chevron, and Daehyeon Refinery's second-largest shareholder was Saudi Aramco.
Chevron wielded substantial influence in American politics, while Aramco was a state-owned enterprise in Saudi Arabia.
Before they could take action, I intended to swiftly release a joint statement and persuade North Korea.
"Boss, we have arrived."
"Let's go inside."
We reached the meeting venue at Jungwoo Group's headquarters.
As soon as I stepped off the elevator on the top floor where the conference room was located, Chairman Yeo Seung-jin's loud voice echoed outside.
"At your age, you're still quite energetic. What a powerful voice you have!"
Recognizing me, the Chief Secretary quickly rushed over, his face full of discomfort, but he didn't obstruct me.
"CEO! You've arrived."
"Are they all in there?"
"Yes, they are."
"Then I'll be going in."
As I approached the conference room, the secretaries opened the door for me.
"I hear Madam Yeo's voice all the way outside. Why are you so upset, Madam Yeo? Be careful or you might collapse from high blood pressure. At your age, you should be cautious."
"CEO Kim! You've come just in time."
What a surprise. After all these years, Chairman Yeo Seung-jin is actually welcoming me.
"I must be in for a surprise tomorrow with the sun rising from the west, given that Madam Yeo is welcoming me now."
After finishing my greetings with the others, I took my seat.
Five people sat around the round table.
"Everyone must be startled by this news?"
"Is that even a question! We should have been consulted about something like this. Was this a cooperation just for show?"
"The chairmen here are of no concern. But if Chevron and Aramco find out, they'll interfere; I couldn't avoid that."
"Hmm… I just received a call from Chevron, curious about what's going on. I told them I wasn't aware. Supposedly, Chevron's executives are coming into the country shortly. Likely, an encounter with Bu Jin-soo rather than myself."
Chairman Yeo Seung-jin spoke in a somewhat calmer voice.
Nodding, I turned to Chairman Song Chan-woo.
"What did Aramco say, Chairman Song?"
"…There hasn't been any particular response yet."
"That makes sense. Aramco probably won't show much reaction."
Aramco was the largest refinery in the world. It wasn't a company that would get too worked up over such matters.
"Daehyeon Refinery can continue operations seamlessly alongside Aramco. Don't feel compelled to be involved in this project."
"I'll convey that message."
With Daehyeon Refinery's issue resolved, I turned to Chairman Yeo Seung-jin once more.
"You raised your voice because of the separation, didn't you?"
"You're aware of that, huh? Yes. If something goes wrong with Geumsung Refinery now, it could lead to discord with the Bu family. Until this division concludes, I need you to announce from the Jungwoo Group that nothing is confirmed yet."
That couldn't happen. I had invested so much effort into this deal; if we delayed any further, sabotage would surely come into play.
"Negotiations with the Russian government have already concluded. If Jungwoo Group offers separate indications, it'll cause discomfort for them…"
"Listen here, CEO. You participated in this project. I provided my mandatory support for the North Korean project, even when my family opposed it. This isn't appropriate behavior."
Yeo Seung-jin, whose voice had raised in urgency, was vehemently opposing.
Seeing that strict elder growing anxious was quite the sight.
Holding back, I decided to produce the gift I had brought.
"If Geumsung Refinery is a problem, we can enhance the value in other sectors. You'll be transferring Geumsung Construction to the Bu family, right?"
"While I will transfer it, realistically, how much can Geumsung Construction's value increase? The crux of the matter lies in Geumsung Refinery."
"Jungwoo Construction will be the PM for the pipeline project between Korea, North Korea, and Russia. We'll make a public announcement of Geumsung Construction's participation in that project."
"What? Jungwoo Construction will be the PM?"
The eyes of everyone except Kim Byung-woo widened.
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