An Investor Who Sees The Future

The X-Cop bidding results spread rapidly to the business and financial sectors.

RCK Bros Vice Chairman Shin Byeong-doo asked in disbelief, “Brought home with just a $100,000 difference?”

“That’s correct.”

$2.93 billion and $2.9301 billion.

Just a $100,000 difference determined the outcome. It’s something almost unheard of in bid amounts in the tens of millions range.

“What do you think?”

The response was almost predetermined.

“It seems like OTK Company and Golden Gate obtained insider information from Eunsung Motors.”

At Manager Ha Chang-hoon’s words, Vice Chairman Shin nodded as if in agreement, “Otherwise, such a result wouldn’t have come about.”

Bidding is a fierce battle. Acquiring information about competitors is essential.

Analyzing all data such as financial capability, current situation, CEO’s tendencies, investment history, and predicting how much the competitor will offer. Conversely, keeping our information strictly hidden and leaking false information.

Except for clearly illegal methods like kidnapping, threats, and wiretapping, all other means are considered acceptable.

If someone truly obtained the bid price beforehand, it reflects poorly on the side that didn’t manage it well. Simply put, they were outsmarted.

RCK Bros also made every effort to uncover competitors’ bid prices. However, without an insider, it was impossible to know the exact amount.

“It means there’s an insider at Eunsung Motors….”

But there’s one point that remains unclear.

“If they obtained Eunsung Motors’ bid price through an insider, how much do you think Manager Ha would have bid?”

“He would have spent $3 million… no, he might have spent $5 million more. That way, he can avoid any suspicions, even a little.”

“That’s common sense.”

Bid prices are top-secret information.

In the final moments of decision-making, only a few people know about it. Before the announcement at RCK Bros, only four people knew the bidding price. Perhaps Eunsung Cha is similar.

“But still, it’s just saying they bid only $100,000 less. It’s like advertising that someone leaked information like an insider.”

Logically, it is unlikely that Han Chanyoung leaked the information.

In the end, only a very small number of people who knew about the bidding prices, including Team Leader Seo Sangwon, are suspected. When the Audit Team of the Group Headquarters begins its audit, finding the insider is not a difficult task.

Since no one would pass on information without any benefit, traces of contact or receiving money would likely remain.

Even if OTK Company and Golden Gate manage to escape, employees who committed illegal acts cannot escape legal responsibility.

“Could it be just a coincidence?”

Team Leader Ha Chang-hoon thought for a moment and then shook his head.

“To be honest, I’m not sure either. It’s a situation beyond our expectations.”

Other companies are probably working hard to speculate and analyze as well. Eunsung Cha must be in turmoil.

“The bidding price must have been written by Director Oh Hyunjoo, right?”

“Yes, probably. Since CEO Kang Jinhoo lacks experience in public bidding.”

In reality, Oh Hyunjoo also lacks experience. However, the results were completely surprising.

“I don’t think Oh Hyunjoo would have written it like this. Could this also be Kang Jinhoo’s doing?”

Vice Chairman Shin Byeong-doo said calmly.

“The commercial banks are in a pity.”

With the acquisition price exceeding 3 trillion, loans are necessary. Considering that 50% of acquisition funds are usually loans, the loan amount alone is 1.5 trillion won.

With a large amount and senior loans, the possibility of loss is zero. They can steadily earn interest for a short period of 5 years to a long period of 10 years until repayment.

Regardless of who succeeds in the acquisition, the banks providing loans were in a win-win situation – like having their cake and eating it too.

Both private equity funds operating with other people’s money and Eunsung Cha, with overflowing retained earnings, have also contracted with commercial banks to receive a 1 trillion won loan upon successful acquisition.

In the funding plan, OTK Company & Golden Gate Consortium was the only one without a loan agreement with commercial banks.

However, they were chosen as the final acquirer, of all things.

From the banks’ perspective, it was interesting to watch, but they ended up not getting a slice of the pie.

***

Before we arrived at the company, the victory report arrived first.

As we entered the Golden Gate Building, the employees gathered in the lobby and applauded. The staff from the Asian office and the Korean office, who were in charge of the due diligence, embraced each other happily.

Despite not being able to sleep properly, everyone worked hard, and it’s fortunate that good results came out.

The operational team has already moved to Morgan Stanley. All that’s left are formalities. Once the detailed conditions are agreed upon, signing the contract and depositing the sales amount will conclude the deal.

The total acquisition amount is 32.23 trillion.

With a 7:3 stake split, OTK Company is responsible for 22.56 trillion. As they decided to take a priority loan of 1.805 trillion from Golden Gate, they only need to cover 451 billion in cash.

There was also a building security manager in the lobby. Naturally, he was part of X Cop.

Hyunjoo approached him and extended her hand.

“Now you’re truly part of the family. Please take care of us in the future.”

The security manager held her hand.

“I will continue to work hard, Director.”

It could be seen as a gesture showing that X Cop is in our possession. The employees once again applauded joyfully.

“You’ve worked hard, Ellie.”

In response to my words, Ellie smiled brightly.

“So did you Jinhoo.”

***

The news of the successful bid was met with cheers at the OTK Company building. Once again, we received congratulations from the employees and made our way up to the CEO’s office.

Senior Sangyeop said, “You really hit the mark. How did you manage it?”

“I was lucky,” I replied.

I explained the reason for spending the amount as I had talked about in the car earlier.

Sangyeop senior looked incredulous. “Really? You didn’t get the information through an insider?”

“If we had an insider, then we could get the information. Where would we know someone over there?”

Sangyeop senior nodded in agreement with my words. “That’s true.”

Then he added, “But they probably don’t see it that way.”

I chuckled. “That’s their own business.”

There was probably no need for me to step in and clear up any misunderstandings. They might have started digging around to find where the leak of information was by now. A storm of audits would likely descend upon them internally.

Sangyeop senior looked amazed. “To barely secure a company worth over 2.9 billion dollars with just a 100,000 dollar difference. Now, nothing you do surprises me.”

“…”

Despite that, he seems incredibly surprised.

I changed the subject. “How’s the company atmosphere these days?”

“Chaotic. Probably because the new hires all came in at once,” Sangyeop senior replied.

If production volume is increased all at once due to increased orders, it becomes difficult to manage quality control. Similarly, increasing personnel all at once actually decreases operational efficiency. It will be unavoidable until new employees adapt to their work.

We should have hired more staff earlier.

“Still, I’m grateful that Michael is doing well.”

As the overall chief CHO, Michael eliminated the traditional hierarchy, streamlined it by dividing teams based on tasks, and simplified it to team leaders and members.

Some existing employees were promoted to team leaders, and new employees were placed under them to efficiently adapt to their work.

Senior Sangyeop handed a document to you.

“Didn’t you ask me to check out a house before? Take a look at this.”

The original house had a low wall and was close to the neighboring houses, making it unsuitable for security reasons.

So we left our well-maintained house and stayed at the Grand Dayton Hotel near Seosung Station.

It is a 5-star hotel operated by the American hotel chain, the Dayton Group, with Golden Gate holding a 20% stake. Therefore, not only Hyunjoo and Eli but also most of the Golden Gate employees staying on business or delegation often stayed there.

However, it wasn’t sustainable to stay at the hotel indefinitely, so we kept looking for a new place to live.

“This time, the CEO of Hyujin Shipping offered his house.”

Taekgyu asked me.

“Did Hyujin Shipping go bankrupt?”

“Yeah, they went bankrupt miserably.”

Although Korea is technically a peninsula nation, it is practically an island due to the blocked land route to North Korea.

As a result, the country heavily relies on maritime transportation for 99% of its import and export, with two national shipping companies, Eunsung Shipping and Hyujin Shipping, owning the market.

“Why did they go bankrupt?”

I briefly explained that the shipping industry is highly volatile depending on economic conditions, with rates fluctuating significantly. In periods of low cargo volume, rates plummet, while in prosperous times, rates skyrocket, making effective management and risk mitigation crucial.

Originally, Hyujin Merchant Marine was run by Jo Dong-wook, the younger brother of Hyujin Group Chairman Jo Hyun-Young, but he passed away from an illness and his wife, Chae Young, took over the management.

“However, Chae Young couldn’t manage the business well.”

During the prosperous times, they paid exorbitant charter fees to shipowners and leased vessels on long-term contracts, but the following year, the financial crisis hit, plunging the entire shipping industry into a downturn.

Freight rates hit rock bottom by the day, but they still had to pay the high charter fees they had contracted in advance.

As Hyujin Merchant Marine continued to operate, losses accumulated, eventually leading to a situation of capital erosion.

“Moreover, their relationship with the government was not good.”

Companies friendly with the government receive benefits, while those not aligned face disadvantages.

Park Si-hyeong had close ties with Eunsung Group and Reteg Group, and these two groups thrived after the current government came into power.

On the other hand, Hyujin Group had long been on the government’s radar. Therefore, instead of injecting public funds to save Hyujin Merchant Marine, the government chose to let it fail.

It’s not a manufacturing industry but a transportation business. Even in bankruptcy, a systematic process could have minimized the damage, but with a single word from the president, bankruptcy was hastily executed.

With Hyujin Merchant Marine collapsing overnight, exporting companies were in chaos. Due to the nature of shipping where costs are settled afterwards, ships floating at sea became stranded, unable to leave the port after completing their shipments.

As export companies rushed to find alternative shipping options, freight rates skyrocketed instantly.

“Doesn’t Eunsung Group face any issues then? They export cars in large quantities.”

That’s a good point.

“Eunsung Group, along with PAS and auto parts companies, all had long-term contracts with Eunsung Shipping. So, from Park Si-hyeong’s perspective, they could easily let go of Hyujin Merchant Marine without any additional burden.”

The company went into court receivership, and stock trading was suspended.

During the process, a surprising fact came to light. The valuable assets of Hyujin Merchant Marine, including buildings, had already been transferred to Hyujin Merchant Marine Holdings, where Chae Young and her children were major shareholders.

Furthermore, just two days before the trading suspension announcement, they sold all the Hyujin Merchant Marine shares they held to avoid losses!

It was a clear case of insider trading.

The losses were solely borne by individual investors.

When this fact came to light, small shareholders became enraged. A petition demanding punishment for the owner’s family members in the political circle swept through.

Until then, Chae Young had been confident. Even if the company goes bankrupt, isn’t it the virtue of this country for the owner’s family to live comfortably?

Unfortunately, Hyujin Merchant Marine was an exception to being business-friendly.

As the political circle criticized with one voice and the prosecution announced they would investigate various allegations, Chae Young quickly appeared on camera, shedding tears, pledging to sell the house she lived in to alleviate the damage to small shareholders even a little.

Taekgyu nodded.

“So, this house is going up for sale?”

I examined the documents.

The location is near Samsung Station, a 5-minute drive or a 20-minute walk from here.

It has a land area of 280 pyeong and a floor area of 140 pyeong, consisting of two basement floors and two above-ground floors.

As it was the former residence of a large conglomerate chairman, there is a satellite antenna on the rooftop to enable work from home, and it is designed to ensure security and protection.

There is direct access without getting out of the car, and there are separate accommodations for security guards and house helpers.

“The price is not listed.”

“I guess around 20 billion won.”

I pondered for a moment.

“But, is there really an intention to sell this?”

Senior Sangyeop chuckled and shook his head.

“It’s probably just listed but not intended to sell. Regardless of the selling price, the money should be distributed entirely to the small shareholders. Otherwise, they might just sell it cheap and repurchase it later.”

From the beginning, Chae Young probably didn’t feel an ounce of remorse towards the Hyujin Merchant Marine small shareholders. It’s likely that she only thought about avoiding responsibility by staging a show of offering the house she lived in… that’s all.

I chuckled and said, “To prevent such things from happening, I suppose I should buy it at my own cost.”