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CH345 | GSI
🕑 Added 2025-05-02 10:35:01 +0000 UTCQuantum Fund Headquarters, 7th Avenue, Manhattan, New York.
In a spacious office overlooking the towering skyscrapers of Wall Street, George Soros and Rodney, the CIO, sat across from each other on a sofa.
“…The Southeast Asian currency crisis has been manipulated by a few wealthy elites and the Western media who do not wish to see Southeast Asia prosper. The key forces behind this crisis are hedge funds led by Quantum Fund, whose wealth has been built by impoverishing others. George Soros and the hedge funds are seizing what Southeast Asian countries have painstakingly built….”
Quoting the remarks made by Malaysian Prime Minister Syed Arif at the IMF annual meeting held in Hong Kong, George Soros tossed the copy of The Wall Street Journal onto the table with a thud.
“He’s really going all out with the accusations.”
Rodney, dressed in a navy pinstripe suit, shrugged his shoulders while lounging on the sofa.
“Considering that the collapse of the ringgit has forced the suspension or delay of Prime Minister Syed’s grand construction projects — like the Petronas Twin Towers and large-scale hydroelectric dams — it’s no surprise he’s furious.”
The Petronas Twin Towers, standing 451.9 meters tall with 88 stories, symbolized Malaysia’s economic growth and, upon completion, would surpass Chicago’s Sears Tower (442.1 meters) as the tallest building in the world.
“The biggest winners from this crisis aren’t us — it’s Eldorado Fund. But they’re targeting me because I’m the face of it.”
George Soros spoke with a hint of irritation.
“Well, when people think of hedge funds, they immediately think of you — the legendary figure of Wall Street,”
Rodney offered a placating remark, carefully watching Soros’s mood.
Leaning back against the sofa, George Soros snorted.
“What good is that? They’re raking in the money while I’m stuck playing the villain everyone loves to hate.”
“If we manage to break Hong Kong next, we’ll overtake Eldorado and reclaim the lead.”
“Naturally. That’s exactly what needs to happen.”
His sour expression revealed just how much it irked him to repeatedly lag behind Eldorado Fund in Thailand, the Philippines, and Indonesia.
For George Soros, a man who prided himself as the godfather of hedge funds and the best in the business, the idea of trailing behind someone like Seok-won was an unbearable blow to his pride.
Perhaps that’s why, unlike before — when he stepped back from fund operations to focus on running his charitable foundation — he had started taking a hands-on role again since the Indonesia trade, leading the trading himself.
The problem was, this renewed involvement had sparked friction between him and Rodney, his presumed successor, creating a subtle but growing rift.
For example, Soros had insisted on closing out their Malaysian positions early and cashing in their profits to move on to Hong Kong. Rodney, however, believed they were exiting too soon and had argued against it.
But in the end, Soros’s stubbornness prevailed, and they liquidated their positions.
While they did lock in a decent profit, Rodney still felt regret — convinced the ringgit had yet to hit rock bottom.
Still, there was little he could do. The fund belonged to George Soros, and his shadow and influence still loomed large.
As Rodney quietly smacked his lips, grappling with a twinge of disillusionment about his role and position, George Soros asked:
“What about the other funds? How are they moving?”
Shaking off his brief thoughts, Rodney replied:
“Some followed our lead and closed out their positions, but quite a few are still holding their shorts.”
Soros frowned, displeased.
“That’s probably because Eldorado Fund is still in play.”
“…Yes, I believe so.”
Clicking his tongue in irritation, George Soros let out a sharp “Tsk.”
It was plain to see that the most money-sensitive hedge funds were now watching Eldorado Fund — no, Seok-won — more closely than him. There was no way George Soros could feel good about that.
All the more reason, then, for him to double down on his determination to bring Hong Kong — a market in an entirely different league from the Southeast Asian countries he had toppled so far — to its knees. He had to prove, once and for all, that Seok-won wasn’t yet on his level.
Tapping the armrest of the sofa with his fingertips while deep in thought, George Soros finally looked up at Rodney.
“The Indonesian rupiah is down to about 4,300 per dollar now, right?”
“Yes. In an attempt to stabilize the exchange rate, Indonesia’s central bank has more than doubled the three-month short-term rate from 11% to 28%, and ordered companies not to sell off rupiah. But it doesn’t seem to be having much effect.”
Soros replied with a dismissive look.
“Telling people to stay put when the ship’s about to sink — no one’s going to listen.”
“You’re exactly right.”
Narrowing his eyes as if calculating something, Soros spoke again.
“We’re up about 53% on that position so far, correct?”
“Yes, that’s right.”
“Then let’s go ahead and close out the rupiah position here.”
Rodney looked startled.
“There’s still more downside left. Isn’t it too early to pull out now?”
But Soros shook his head.
“Indonesia doesn’t have much left in the tank. They’ll have no choice but to go to the IMF soon.”
“……”
“When that happens, the crashed rupiah will rebound. Better to get out before then.”
But Rodney, who didn’t share the same view, leaned forward and pressed his case.
“You’re right, they’ll eventually have to request IMF assistance. But judging by how tough the Indonesian government is acting right now, I believe there’s still more profit to squeeze out.”
Even as Rodney made his argument, Soros wasn’t interested in hearing more. He stuck to his decision firmly.
“That’s not how I see it. And to bring down a tough opponent like Hong Kong, we can’t afford to spread ourselves thin. We need to concentrate everything on this one shot.”
In the end, it was clear that Soros intended to swiftly wrap up their Indonesian positions — just as they had in Malaysia — so they could go all-in on Hong Kong.
Rodney thought it was still too early and wanted to try persuading him one more time. But when he saw Soros’s stubborn expression, he gave up.
He knew from experience that no matter what he said, Soros wouldn’t listen.
A wave of disillusionment washed over him again, but Rodney masked his feelings and gave a reluctant answer.
“…If that’s your decision, I understand.”
* * *
[Breaking News: The Bank of Japan has announced that it will coordinate with Indonesia’s central bank and the Monetary Authority of Singapore to buy rupiah in large amounts, aiming to halt its decline in the Tokyo and Singapore forex markets. The planned intervention amount is estimated at $100-300 million… As the currency collapse that began early this year continues to spread across Southeast Asia, the Bank of Japan’s move appears to be an effort to expand its influence and leadership in the Asian currency markets. Meanwhile…]
Fresh out of the shower, Seok-won, draped in a bathrobe, opened the fridge. He pulled a round ice cube from the ice tray and dropped it into a prepared rocks glass. After filling it halfway with whiskey, he took a sip, savoring the refined taste as it lingered on his tongue.
Holding the glass in one hand, Seok-won walked into the living room and stared at the TV screen. A large, state-of-the-art PDP TV, occupying one side of the wall, was displaying a live broadcast from an American satellite network.
On the screen, the middle-aged governor of Indonesia’s central bank was answering questions from a reporter, his voice firm as he insisted that the rupiah would be defended at all costs.
Seok-won, sitting on the sofa, muttered with a nonchalant expression, “Do they really think that with just $300 million, they can fend off the hedge funds’ attacks?”
With the value of the rupiah crashing, not only hedge funds and foreign investors but also local Indonesian companies were frantically selling off rupiah to secure dollars. The amount of money the central bank had left was enough to barely last four days.
“Their foreign exchange reserves are nearly depleted. It won’t be long before they abandon their defense of the rupiah and go to the IMF for assistance.”
If the exchange rate could stabilize, that might be a silver lining, but the real problem lay in the harsh demands of the IMF, which could force Indonesia’s government to walk away from the negotiation table in frustration.
“It wasn’t just Korea. Many Southeast Asian countries hit by the financial crisis had to endure considerable hardships at the hands of the IMF.”
On top of that, there was the looming health crisis of President Suharto, who had ruled Indonesia for 32 years. His deteriorating health was a potential time bomb that could plunge the country into even greater turmoil.
“If I remember correctly, Indonesia’s government only yielded to the IMF’s pressure when the rupiah passed 10,000 to the dollar, and the economy had collapsed.”
In other words, there was still plenty of room left for Seok-won to capitalize on the weakness of the Indonesian rupiah.
Bringing the glass to his lips, Seok-won continued, “And now, it’s almost time for some of the major domestic corporations that had been quiet for a while to start announcing bankruptcy.”
Just the thought of it made his chest tighten.
Trying to shake off the oppressive feeling, he took another sip of whiskey. But at that moment, the sound of his phone ringing interrupted his thoughts.
“Hello.”
[Boss, it’s me.]
“I’ve been waiting for your call. Did you manage to make any headway with Qualcomm?”
[We raised the offer, but they categorically rejected it, saying they would never sell the CDMA patents.]
“Hmm... That’s disappointing.”
Landon, on the other end of the line, spoke with an apologetic tone.
[I’m sorry.]
With the explosive growth in mobile phone adoption, Seok-won had offered a huge sum to acquire Qualcomm’s CDMA patents, which would soon become a goldmine. However, Qualcomm, having developed the technology, knew its value all too well and was refusing to part with it.
“Well, if they won’t sell the patents, we’ll just have to buy the whole company.”
[You’re considering a hostile takeover?]
“Exactly. What’s Qualcomm’s market cap these days?”
[It’s risen quite a bit recently. It’s around $7.3 billion.]
With over $10 billion in annual revenue from CDMA royalties and modem chip sales, Qualcomm was a rapidly growing semiconductor company — practically a steal at that price.
“Let’s use the revenue we received from the Japan branch to buy up as many shares as we can.”
[Do you want to spend all $4 billion of it?]
Landon sounded surprised.
“Yes, we need to secure a majority stake to take control of the company.”
Seok-won, who usually showed little interest in corporate governance despite buying shares, seemed unusually intent on this move. Landon, sensing Seok-won’s determination, hesitated before asking carefully:
[Is it really worth investing that much to acquire the company?]
“Of course.”
Seok-won replied without hesitation.
He didn’t feel the need to explain further, and Landon, sensing that the matter was settled, nodded without asking any more questions.
[Understood. I’ll start acquiring Qualcomm shares as instructed.]
“Ah, and make sure to acquire the shares through Frey, not the Eldorado Fund.”
Frey, the name of Seok-won’s personal holding company, was derived from the god of wealth, sunlight, and rain in Norse mythology. The company was registered in the Cayman Islands.
[Got it.]
After a brief conversation, Seok-won ended the call.
He folded his phone and set it back on the table. Holding the rocks glass in his hand, he muttered, “Normally, I wouldn’t go this far, but Qualcomm is the one that broke trust first. I have no reason to feel guilty.”
In reality, Qualcomm owned the CDMA technology, but just a few years ago, it was on the brink of bankruptcy because it lacked the capability to commercialize the technology. Then, it caught the attention of Korea, which was developing mobile communication technologies. With a development fund of $16.95 million (about 12 billion KRW) from Korea, Qualcomm was able to collaborate with the Electronics and Telecommunications Research Institute (ETRI) to successfully commercialize CDMA.
“In fact, without Korea, neither Qualcomm’s future nor CDMA technology would have seen the light of day. It would have been abandoned.”
Yet, as CDMA became the standard technology and mobile phone use skyrocketed, Qualcomm earned massive profits by charging Korean manufacturers a 5% royalty fee per phone.
“They didn’t foresee the future and made those royalty contracts, but what’s frustrating is that Qualcomm has made a huge profit, getting royalties at a higher rate than other countries, all thanks to Korea.”
It was as if Korea did all the hard work, while Qualcomm reaped all the financial benefits.
In his past life, Seok-won had to endure Qualcomm’s bullying because of the patent issues. But this time, he had no intention of letting them get away with it.
