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CH122 | GSI
🕑 Added 2025-02-11 03:35:01 +0000 UTCMapo District, Daehung Group Headquarters
Beyond the large windows, the cityscape stretched out in a sweeping panorama. Inside, Chairman Park Tae-hong sat at his spacious mahogany desk.
At 65 years old, the passage of time was evident on his face, yet his broad shoulders and solid chest still exuded an unshakable presence, like an immovable mountain.
Leaning back into his plush chair, he held the newspaper in both hands, carefully reading each article. Soon, his eyes fixed on a particular piece.
[Barings Bank on the Brink of Bankruptcy!]
A financial institution with over 230 years of history, often called "The Queen's Bank," Barings is facing bankruptcy due to the reckless investment activities of one of its derivatives traders.
By deceiving the company and making unauthorized investments in Nikkei futures and Japanese government bonds—while claiming to purchase index futures for clients—the employee has incurred losses amounting to $1.12 billion.
This amount exceeds three times Barings Bank's total assets, making it the worst financial scandal in British history.
Barings has made an urgent appeal to England, but the bailout request has been denied, and bankruptcy appears inevitable.
Meanwhile, the trader responsible for the fiasco has fled Singapore, prompting the issuance of an arrest warrant. Interpol has confirmed that law enforcement agencies in Singapore and Malaysia are cooperating in efforts to apprehend the fugitive.
Amidst this turmoil...]
"Unbelievable… One employee single-handedly brought down a bank with a 230-year legacy. What a disgrace."
Chairman Park shook his head in exasperation at the absurdity of the situation.
Just then, a knock sounded at the door, and his secretary, Assistant Manager Jung Yoon-kyung, entered.
"Chairman, President Park Jin-hyung and Chief Secretary Gil are here."
"Let them in."
Placing the newspaper down, Chairman Park gave a brief nod.
Jung Yoon-kyung exited, and moments later, his eldest son, President Park Jin-hyung, and Chief Secretary Gil Seong-ho stepped into the office.
Rising from his seat, Chairman Park gestured toward the seating area.
"Have a seat over there."
"Yes, sir."
As the two men settled into the sofas facing each other, Chairman Park moved from behind his desk and naturally took the central seat, the position of authority.
"Would you like some tea?"
At Jung Yoon-kyung's question, Chairman Park glanced at the two men before responding.
"I'll have coffee. What about you two?"
"I’ll have the same," Park Jin-hyung replied.
Gil Seong-ho then looked toward Jung Yoon-kyung, who was standing nearby.
"Three coffees, please."
"Understood."
After Jung Yoon-kyung left the room, Park Jin-hyung spoke up.
"I thought you had given up coffee while taking your herbal medicine."
"I'm sick of hearing about that damned medicine. I finished the last dose yesterday, so there’s no need to worry."
Chairman Park scowled, his tone irritable.
Gil Seong-ho cast him a concerned glance.
"Still, drinking coffee right away might not be good for you."
"If a bit of coffee is enough to nullify its effects, then that so-called medicine must have been made with bellflower root instead of wild ginseng."
It was remarkable that Chairman Park Tae-hong had managed to abstain from coffee for fifteen days, given that he typically drank four to five cups a day. Recognizing this feat, the two men remained silent.
At that moment, Assistant Manager Jung Yoon-kyung entered, carrying a tray. She placed a cup in front of each of the three men and then quietly exited the room.
Chairman Park immediately picked up his cup and took a sip. Letting out a satisfied hum, his expression relaxed as if he had finally found relief.
"Sweet and rich—just as I like it. I swear, my brain only functions properly when I drink coffee."
If Madam Jo Deok-rye had been present to witness this scene, she would have launched into a long lecture. But now that he had escaped the misery of his herbal medicine regimen, Chairman Park was savouring this moment as if it were paradise.
Setting down his cup, Chairman Park leaned back and addressed the two men.
"By the way, did you see the article about Barings Bank in today’s paper?"
"The one about its impending bankruptcy?"
"That’s the one."
At Secretary Gil Seong-ho’s response, Chairman Park gave a slight nod.
"When we were exporting cotton to Europe, we had dealings with them."
"I’m surprised you still remember that—it was quite a long time ago."
Recalling the past, Chairman Park frowned slightly.
"They were so damn particular—it still gives me a headache just thinking about it. And now, that same high-and-mighty bank is on the verge of collapse. Life truly is unpredictable."
Gil Seong-ho, who had struggled alongside Chairman Park to establish export channels in Europe, nodded, his expression mixed with emotion.
"Indeed, sir."
"What do you think will happen next?"
"You mean Barings Bank, sir?"
"Yes."
Carefully choosing his words, Gil Seong-ho shared his thoughts.
"It seems likely that they’ll begin bankruptcy proceedings within the next few days."
However, President Park Jin-hyung offered a different perspective.
"A bank with such deep-rooted history, often referred to as 'The Queen’s Bank'—I find it hard to believe they would allow it to close so easily."
Chairman Park agreed with his son’s reasoning.
"As President Park pointed out, the bank holds significant symbolic value. If they let it go under, the fallout would be massive. The British government won’t just stand by and watch."
"Given the potential repercussions, the British government must be grappling with a difficult decision. In fact, there was a time long ago when Barings Bank received a bailout to stay afloat," Gil Seong-ho added, subtly observing Chairman Park’s reaction.
Seeing that the chairman was listening intently, he continued.
"But the situation now is entirely different from back then."
"And how is it different?"
Chairman Park folded his arms, looking at Gil Seong-ho with interest.
"At that time, Barings Bank was nearly as powerful as the Rothschild family. If they had been allowed to collapse, the entire London financial market could have crumbled. It was a crisis that forced the government’s hand."
"In other words, it was 'too big to fail.'"
"Precisely."
The phrase ‘too big to fail’ referred to businesses or industries so large that their failure would have devastating effects on the national economy, making bailouts necessary.
"But unlike then, Barings Bank today is nothing more than a small-scale institution."
Understanding the implication, Park Jin-hyung let out a low sigh before speaking.
"So, it’s a bank that no longer holds enough value to justify a massive taxpayer-funded bailout."
"Exactly."
Chairman Park Tae-hong gave a solemn nod.
"In the past, it survived thanks to the 'too big to fail' logic, but now, ironically, it’s too small to warrant a rescue and is left to collapse. Life certainly has its twists."
"This incident has even caused trouble for Daegwang Group, despite them having no direct involvement."
Chairman Park looked at Secretary Gil Seong-ho with a puzzled expression.
"Why Daegwang Group?"
"They were planning to list their parent company, Daegwang Corporation, on the London Stock Exchange through a foreign Depositary Receipt (DR) issuance. However, due to the Barings Bank crisis, market sentiment has turned cold, and the plan has been scrapped."
When a company seeks foreign capital by issuing shares on an overseas stock exchange rather than its domestic market, they deposits a certain amount of stock and issues a substitute security with the same function as the original. This is known as a Depositary Receipt (DR).
"Now that you mention it, I do recall hearing that Daegwang Group planned to issue DRs worth $70 million in the UK to raise capital."
"Since their original plan fell through, they are now preparing to issue convertible bonds (CBs) of the same amount instead."
"Even though CBs can be converted into stocks later, they are still fundamentally debt instruments. This must be quite disappointing for Daegwang Group."
At that moment, Chairman Park suddenly recalled a recent conversation he had with his second son, Seok-won.
"Courage without the right timing is nothing but recklessness."
"The abundant liquidity will dry up all at once, like a receding tide, and in an instant, the money will disappear."
At first, he thought his son was simply being overly cautious.
However, upon reflecting on their discussion, he realized there were issues he had either overlooked or dismissed as insignificant—issues that were now becoming painfully clear.
If a crisis like the one Seok-won had warned about truly came to pass, could Daeheung Group withstand it?
The mere thought of it made Chairman Park feel a chill run down his spine.
After several days of contemplation, he had reached a decision. That was why he had called his most trusted advisor, Gil Seong-ho, and his eldest son, Park Jin-hyung, to this meeting.
Reaching out, Chairman Park lifted the wooden lid of a box resting on the table.
He pulled out a cigarette, placing it between his lips. Gil Seong-ho swiftly took out a lighter from his inner pocket and lit it for him.
Chairman Park took a deep drag, then exhaled slowly before asking,
"The bidding for the Sampoong Department Store site is coming up soon. Lotte and Utopia have confirmed their participation, haven’t they?"
"Yes. They’ve already assembled separate teams and begun preparations."
Clicking his tongue in annoyance, Chairman Park scowled.
"It would have been easier for everyone if they just sat this one out. But greedy bastards like them would never do that."
Lotte and Utopia were two companies aggressively competing for Daeheung Group’s core business—department stores. It was no surprise that Chairman Park felt displeased.
Sensing his boss’s irritation, Gil Seong-ho spoke in a calm tone, as if to ease the tension.
"We’ve secured a loan commitment from our main bank for the acquisition funds, and we are preparing thoroughly. The Sampoong Department Store site will not be taken from us easily."
"It better not be. No—no matter what happens, we must win this bid."
Chairman Park’s thick eyebrows rose as he made his determination clear.
"In the end, it will come down to a battle of financial strength. Make sure to gather as much liquidity as possible before the bidding."
Hearing this, Gil Seong-ho grew increasingly concerned. Given the group’s already strained financial situation, was this level of risk really wise?
However, the Sampoong Department Store site was a battleground significant enough to determine the future dominance of the department store industry—one worth fighting for with everything they had.
Understanding this, Secretary Gil Seong-ho said nothing more and simply followed Chairman Park Tae-hong’s orders.
"Understood."
Chairman Park lightly tapped the ash from his cigarette into the crystal ashtray on the table, then spoke in a slightly subdued voice.
"And while we’re at it, I’m thinking of trimming the excess fat from the group by restructuring and getting rid of unprofitable affiliates. What do you two think?"
Both President Park Jin-hyung and Secretary Gil Seong-ho looked startled by the sudden topic.
"Are you planning a corporate restructuring?"
Park Jin-hyung asked with a firm expression. Chairman Park nodded, the cigarette still between his lips.
"Yes."
Observing Chairman Park's demeanour, Secretary Gil Seong-ho carefully inquired,
"What made you come to this decision?"
President Park Jin-hyung also turned his gaze toward his father, curiosity written on his face.
Letting out a long sigh, Chairman Park, still holding his cigarette between his fingers, responded with a troubled expression.
"I’ve spent years trying to diversify our business, knowing that we were too heavily focused on department stores and textiles. But let’s be honest—the results have been disappointing."
"……"
Since Chairman Park himself had been the one pushing for business diversification, this admission felt like exposing his own failure. Neither of the two men could bring themselves to say anything, only shifting their eyes awkwardly.
"We’ve poured money into these businesses for years, yet they’ve produced no results. Doesn’t that tell you all you need to know?"
"Still, if we wait a little longer, something promising might come out of them."
Secretary Gil Seong-ho spoke in an attempt to offer encouragement, but Chairman Park shook his head.
"If that were the case, we would have seen some kind of progress by now. Holding on just because it feels wasteful to let go will only bleed us further."
It was undeniable that the group's financial situation had been strained by the persistently unprofitable subsidiaries.
Moreover, seeing how resolute Chairman Park was, Secretary Gil Seong-ho refrained from further objections.
President Park Jin-hyung also remained silent. But after his earlier conversation with Seok-won, he had already been considering the necessity of cutting losses. In his silence, he conveyed his agreement.
Chairman Park gestured toward his eldest son with the hand holding the cigarette.
"This is the group you’ll be leading in the future. Work with Secretary Gil to put together a list of affiliates that need to be cut."
"Me?"
"Yes. Why? Do you lack confidence?"
President Park Jin-hyung hadn’t expected such a major responsibility to be placed on him. Though momentarily caught off guard, he quickly masked his surprise and his eyes gleamed with determination.
"Not at all."
He straightened his posture, his voice firm with conviction. Seeing this, Chairman Park gave a nod of approval.
"Good. This will be your first step in shaping the future vision of the group, so think carefully and handle it well."
"Yes, I won’t let you down."
"As you should."
Though his tone was gruff, Chairman Park’s words carried unmistakable trust in his eldest son.
TL/n -
It looks like you meant "Depository Receipt" (DR). A Depository Receipt is a financial instrument issued by a bank that represents shares in a foreign company. It allows investors to hold shares of companies that are not listed on their local stock exchange.
Types of Depository Receipts =>
1. American Depository Receipt (ADR) – Traded in the U.S. and denominated in USD.
2. Global Depository Receipt (GDR) – Traded in international markets (outside the U.S.).
These receipts make it easier for investors to buy shares in foreign companies without dealing with complex regulations.
###
A Convertible Bond is a type of bond that can be converted into a predetermined number of shares of the issuing company’s stock. It is a hybrid security, combining features of both debt and equity.
Key Features =>
1. Fixed Interest Payments – Like regular bonds, convertible bonds pay interest (coupons) until they are converted.
2. Conversion Option – Bondholders have the right (but not the obligation) to convert their bonds into shares.
3. Lower Interest Rates – Since they offer the potential for equity conversion, they usually have lower interest rates than regular bonds.
4. Upside Potential – If the company's stock price rises, investors can convert and benefit from capital gains.
5. Downside Protection – If the stock price falls, bondholders still receive fixed interest payments and principal repayment.
Why Companies Issue Convertible Bonds?
- To raise capital without immediately diluting equity.
- To attract investors with lower borrowing costs.
- To provide an option for future equity financing.
