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CH81 | Heir
🕑 Added 2025-04-04 05:36:59 +0000 UTCThe most important aspect of political fund transfers: Secrecy
Both the giver and the receiver faced significant risks, which meant that only perfectly laundered funds could be used.
Companies typically funneled slush funds into political contributions or used financial hubs like Myeong-dong to launder money before transferring it.
"In South Korea, any attempt to launder money will eventually get caught. That’s why I plan to use Wall Street to clean the funds before delivering them as political donations."
"If you’re using Wall Street, what exactly do you mean?"
"We’ll establish a fund. The opposition candidate’s campaign chairman will invest in this fund, and within three months, that investment will yield over ten times its initial value."
This was a way to provide political funds without breaking any laws.
Setting up a fund was legal.
Investing in a fund was legal.
Profiting from a fund was legal.
Then why hadn’t this method been used before?
Because no one could guarantee a tenfold return on investment.
But I could.
And with the looming Asian financial crisis, it was the perfect moment to execute this strategy.
"So, you’re saying you’ll create a fund that guarantees a tenfold return. I understand now."
"It might not work exactly the way you’re imagining, but yes, we’ll use a Wall Street fund to deliver political contributions."
The Chief Secretary was misunderstanding something.
‘A guaranteed tenfold return.’
To him, that phrase implied using shady tactics to artificially inflate profits.
But I had a legitimate way to make it happen.
"I’ll have someone from Wall Street reach out to the opposition’s campaign chairman."
"So, should we transfer our funds to Wall Street now?"
"For now, just hold on to them. I’ll let you know when we actually need the money."
In reality, I had no intention of using the Chief Secretary’s carefully laundered slush fund.
Using such money carried unnecessary risk.
Instead, I’d set it aside—perhaps as a retirement bonus for him later.
***
A month later
Jung Bae-chun, the campaign chairman, met with the Wall Street representative introduced to him by Taewoo Group.
Without hesitation, he transferred 1 billion won from campaign funds into the Wall Street fund, trusting Taewoo Group’s assurance that this method wouldn’t violate election laws.
"No matter how I think about it, this just doesn’t sit right. I put money into a Wall Street fund, but I can’t shake the feeling that I’ve been scammed."
"I feel the same. I’ve never handled political contributions this way before, so I don’t really know what to expect."
"You speak some English, don’t you? Call the U.S. and find out what’s happening with our investment."
His aide made an international call.
For over ten minutes, he struggled through a conversation in broken English. Then suddenly, he started repeating, "Thank you, thank you, thank you!"
"What’s going on?"
"The fund has already tripled in value. Within two months, it’s expected to surpass 10 billion won."
"So our 1 billion won has already become 3 billion? And in two months, it’ll reach 10 billion?"
"Yes. They said they’ll send over the official documents via email."
"This isn’t some kind of scam… is it?"
"Taewoo Group made a promise, so it can't be a scam."
The campaign chairman scratched his head.
He had simply put money into a fund, and now, it had tripled in value.
He had no idea what kind of magic Taewoo Group had performed.
"Legally speaking, it seems there’s no issue..."
"Every step of the process is completely legal. Our lawyers unanimously agree that no connection to Taewoo Group can be traced, and there are no legal concerns."
"Unbelievable. People always say that South Korea’s top minds are all absorbed into major conglomerates, and now I see why. This is a truly ingenious method."
"We’ve heard of using stocks to secure campaign funds before, but utilizing a Wall Street fund like this? This might be the first time in South Korean history."
Simply put, it was stock price manipulation to inflate assets.
Traditionally, companies would collaborate with financial networks like those in Myeong-dong to manipulate stock prices and generate campaign funds.
However, this method carried severe legal risks and could severely damage public sentiment, making it difficult to execute.
But funds?
Funds had none of those issues.
Since it wasn’t tied to Korean stocks, there was no risk of negative public perception.
In fact, receiving money from a Wall Street fund meant they were technically bringing in foreign capital.
"If the money in the fund really increases tenfold, we won’t have financial worries for a while."
"It’s practically as if we’ve secured 100 different campaign contributions."
"Taewoo Group is certainly playing on a grand scale. No wonder VIP has such a close relationship with Chairman Kim."
"If we win this election, I’d really like to repay Taewoo Group for their support."
"Oh, come now! 'Repay' isn’t the right word. We’re working alongside Taewoo Group for the advancement of the South Korean economy, not out of petty gratitude."
"You're right, I misspoke. What I meant was that I want to develop South Korea together with Taewoo Group."
"That’s the spirit!"
A political fund of 10 billion won.
For the opposition party, which was heading into a tough election, this was essential funding.
And Taewoo Group had not only provided it but had done so through an entirely legal method.
***
July 1997
The South Korean economy was deteriorating rapidly.
Sensing the urgency, my grandfather convened an emergency meeting with the company’s top executives.
"How many major corporations have collapsed already? It started with Hanbo, then Sammi, Jinro, Samlip, and now even Haitai."
"Reports are flooding in that Kia Group is essentially on the brink of bankruptcy."
"Kia Group is ranked fourth in the industry. If even they collapse, what will happen to the Korean economy...?"
Then, my grandfather turned toward me.
He must have remembered my earlier warning about the impending crisis for Kia Motors.
Kia Group’s downfall meant the end of the 'too big to fail' belief in South Korea.
As I met my grandfather’s gaze, I shifted the focus beyond Korea, explaining the broader situation in Asia.
"Thailand’s financial crisis has now fully erupted. The value of the baht is plummeting at an alarming rate, and the economic situation in surrounding countries is worsening as well."
"What are the chances that the Southeast Asian financial crisis will spread to South Korea?"
"I’ll answer that question."
Fukuda, the advisor, stood up from his seat.
Until now, he hadn’t had the authority to attend the executive meeting.
However, both the president of Taewoo Securities and I had strongly insisted on his presence, and he was finally allowed to participate.
"Right now, it’s being called the Southeast Asian financial crisis, but before the year ends, it will undoubtedly escalate into a full-blown Asian financial crisis. Taiwan, South Korea, and even Japan will soon face serious risks."
"The dollar exchange rate has already surpassed 890 won. Are you saying it will rise even further? That sounds far too pessimistic."
Bae Sung-kyun, the president of Taewoo Motors, immediately voiced his opposition.
As the vice chairman of the group, he was well aware that both Taewoo Motors and Taewoo Electronics had achieved significantly better performance compared to the previous year.
For him, accepting the idea of an economic crisis was difficult.
Taewoo Group was thriving more than ever—how could a financial meltdown be just around the corner?
"The South Korean government’s foreign currency reserves are less than 30 billion dollars. Meanwhile, the country’s external debt exceeds 100 billion dollars. The government is completely unprepared for a financial crisis. On top of that, small and medium-sized businesses are already struggling to pay wages, with overdue salaries surpassing 600 billion won."
"Are unpaid wages really that high?"
"The moment short-term loans start pulling out, the exchange rate will skyrocket past 1,500 won in no time."
"But the government and media keep releasing reports saying there’s no economic crisis. Even the IMF’s managing director agrees."
At that time, the IMF’s managing director had indeed downplayed the risk of a financial crisis in South Korea.
However, that was because he wasn’t yet fully aware of the actual situation.
Soon enough, he would change his stance.
"While some media outlets deny the crisis, others are heavily emphasizing the risk of an impending foreign exchange crisis."
"So, are you saying it’s a 50:50 chance?"
"I see it as 100%. Considering the South Korean government’s financial situation and the reckless management practices of corporations, an economic crisis is inevitable."
"Reckless management? Are you insulting South Korea right now?"
Fukuda was Japanese.
Hearing a foreigner criticize South Korean business practices infuriated President Bae Sung-kyun.
"Tell me, in what other country are transactions settled with promissory notes? If even a single link in the chain fails, the entire system collapses."
"Enough. We must prepare for the worst-case scenario. Fukuda, what do you suggest we do?"
"Taewoo Group is in a good position. Director Kim Min-jae has been making the right preparations in advance. As long as we use our existing funds to lower our debt ratio as much as possible, not only will we survive the crisis, but we’ll emerge even stronger."
Silence fell over the room.
At last, the executives realized that the financial crisis was no longer a distant possibility—it was right at their doorstep.
***
The tense atmosphere of the executive meeting was completely different from the mood in Captain Kang’s office.
"Boss! We’ve already made over 5 billion dollars from our investments in Thailand. By next month, we’ll at least triple that amount."
"And what about the returns on the political fund?"
"Thanks to investing only in prime opportunities, we've easily surpassed tenfold returns. It was possible because the amount was relatively small."
For Team Leader Han, 1 billion won was practically pocket change.
Doubling a $10 billion investment was challenging, but generating tenfold returns on just 1 billion won was not difficult.
"If we've exceeded 10 billion won, tell them to withdraw the funds."
"They already reached out. I'll transfer the money to the sponsorship chairman’s account before the day is over."
"By the way, how is Wall Street viewing Korea's situation?"
"There’s a growing sentiment to pull funds out. However, Japan is reacting even more sensitively than Wall Street. They’ve already started recalling short-term loans."
This was an unchanged chapter of history from my previous life.
As Japanese capital withdrew, the foreign exchange crisis would escalate even more rapidly.
Korean banks had borrowed short-term funds from Japan and then lent them to domestic corporations at higher interest rates to profit off the margin.
However, they hadn’t anticipated the possibility that these corporations might default.
The banks had borrowed far more from Japan than they had in reserves, and when companies went bankrupt, the banks had no choice but to cover the loans with their own capital—except they didn’t have enough.
And so, the banks would collapse as well.
"It’s time to make our move. Liquidate all assets except for the stocks we’ve invested in U.S. IT companies."
"That’s over $20 billion. Are you saying we should hold all of it in cash?"
"We’ve accumulated this money for this moment. This is our opportunity to turn $20 billion into over $200 billion."
Attractive companies were about to hit the market at bargain prices.
To fill our shopping cart, we needed liquidity.
