Nomura Securities, Japan's largest brokerage firm.
President Han Jeonghun personally visited Nomura's headquarters in Tokyo, where he was greeted by Representative Norihiko Nashino.
"It's a pleasure to meet you. I'm Han Jeonghun of Taewoo Securities."
"I've heard a lot about you. Aren't we, in a way, comrades? We both faced the battlefield of the Lehman crisis together," Nashino said with a smile, shaking Han's hand.
During the Lehman crisis, Taewoo Group wasn't the only one acquiring companies—Nomura Securities had also absorbed many firms.
In particular, Nomura had practically taken over Lehman Brothers' Asian and European branches.
Two firms were widely recognized as the winners of the Lehman crisis: Taewoo Securities and Nomura Securities.
That was why Nashino spoke of comradeship.
"After practically taking over Lehman, are you managing all right? Taewoo Securities took a significant hit acquiring AIG."
"There's no major issue in Asia, but the European branches are a bit challenging. Still, we can normalize them within a year."
"As expected of Nomura Securities. Truly deserving of Japan's top brokerage reputation."
"I've also heard that you want to do business with us. I'm curious—what kind of business do you have in mind?"
The first to make a move was Representative Nashino.
President Han, as if he had been waiting for this moment, pulled out several documents and handed them to Nashino.
"Taewoo Securities has developed a new financial product. I thought you might be interested, so I came personally to present it."
"If it's a product created by President Han, who's well-known even on Wall Street, it can't be an ordinary offering," Nashino said.
He slowly read through the materials, his lips gradually curling upward—a smile that looked almost like he had caught a big opportunity.
"This is a very aggressive financial product. For Taewoo Securities to profit, Japan would essentially need to slip back into a bubble economy."
"It's not that extreme. Even if manufacturing stocks fall by only about 20%, the product's conditions are sufficient to generate profit."
"To see stocks drop 20%, wouldn't an event similar to a bubble crisis need to occur? Well, it's too good a deal for us to pass up, but are you sure Taewoo Securities is comfortable with these conditions?"
Nashino was the one expressing concern—for Taewoo Securities. The terms were extremely favorable to Nomura.
"This is a financial product I personally created. So, what do you think? If you're interested, shall we sign a contract?"
"It's almost like insurance. You pay premiums each month, and if stock prices drop more than 20%, you receive twenty times the premiums paid. Hmm, excellent. I see no reason to reject such a compelling offer."
There was no reason for Representative Nashino to refuse.
Japan's economy wasn't in bad shape at the moment.
After the Lehman crisis, the Japanese government had implemented quantitative easing policies, and corporate stock prices were gradually rising.
"If you think this is a good proposal, I hope you'll consider introducing it elsewhere as well."
"Is there any need to introduce it elsewhere? Nomura Securities will take the entire volume."
"The volume is substantial. We plan to finalize contracts totaling 30 billion dollars by the end of this year."
"Thirty billion dollars, not thirty million?"
No matter that Nomura Securities was Japan's largest brokerage, it wasn't capable of handling thirty billion dollars on its own.
Even a major Wall Street investment firm would find thirty billion dollars an overwhelming amount.
"Considering Taewoo Group, thirty billion dollars isn't such a huge sum," Han said.
"I'm not sure what Taewoo Group is thinking. Nomura Securities can probably manage contracts up to five billion dollars," Nashino replied.
"Is that really the maximum you can handle?"
"How could we refuse such favorable terms? Even if it stretches us a bit, we'll absorb as much volume as possible."
Nashino wanted to take on more, but being a cautious man, he decided to cap it at five billion dollars.
"We'll send specialized personnel to coordinate the details. Thank you for enabling such a valuable contract," Han said.
"The thanks are mine. I'll also introduce you to some contacts I know. There will be quite a few brokerage firms interested in this," Nashino responded.
"I'm glad we came to Nomura. Your help is truly appreciated."
"Weren't we comrades in the Lehman crisis? This is the least I could do," Nashino said, extending his hand.
Han smiled and shook it.
Comrades? Fellow warriors?
What a laughable notion.
This contract was ultimately structured so that one side would take a massive hit.
Like Wall Street, Nomura Securities was nothing more than a hyena—and so was Taewoo Securities.
Two hyenas, ready to tear into the weak.
A fight had begun that would only end when one side's neck was ripped out.
**
It wasn't until autumn arrived that President Han completed his business trip to Japan and fully returned to Korea.
Of course, given the short distance, he had occasionally come back to Korea in the meantime, but today marked his complete return.
"You worked hard. How was life in Japan?"
"Leaving Korea is always a struggle because of the food. The first week, Japanese cuisine suited me fine, but after a month, everything was either too sweet or too salty. My palate was so bored I thought I'd die," Han said.
"Your palate may have been bored, but I hear the results were anything but," I replied.
A triumphant smile spread across Han's face as he pulled out a stack of documents and handed them to me.
"Starting with Nomura Securities, I've signed contracts with various financial institutions and a few corporations. The total exceeds fifteen billion dollars."
"Not bad. With the remaining fifteen billion, focus on short selling and targeting the yen."
"Initially, we'll short Japanese manufacturing stocks with ten billion dollars, and we've planned to use the remaining five billion to target the yen."
It was a solid plan.
Of course, if the full thirty billion dollars had been deployed through insurance-like financial product contracts, the profit could have been even greater. But the Japanese financial sector could only absorb so much.
That meant profits had to be secured through other means.
Short selling and yen targeting were chosen as the alternative strategies.
"So the planning phase is complete."
"Yes, but there's no sign of the situation unfolding yet. For the level of economic crisis you mentioned to occur, there need to be precursor signals—but on the contrary, Japan's economic conditions are far too favorable."
President Han was someone who trusted me and carried out all the plans.
Still, he held a sliver of anxiety. He had achieved many things that seemed impossible alongside me, which is why he was proceeding with this operation without resistance.
"The embers of the Lehman crisis haven't fully died out. The Japanese government is implementing quantitative easing, but that will actually stoke the embers. By early next year at the latest, signs will begin to show."
"We can hold on until next year, but we cannot make it through the year after. From then on, we will have to use hidden assets to survive."
The assets of SAVE Investment Company and the paper companies.
Most were held under assumed names at the fintech bank, and the rest were kept in paper company structures.
They served as a form of insurance.
Han believed the insurance was so reliable that the operation could recover even if it failed.
"Even if things go wrong in Japan, using our hidden assets to attack Europe should at least help us break even. So do not worry."
"I'm not worried. There have been many heart-stopping moments while working with you, Chairman. But we've never failed, have we? So I have decided not to worry anymore."
"Good. Instead of worrying, use your time to figure out how to squeeze even a single won from Japan."
President Han's gaze did not waver at all.
He was not just saying he wasn't worried; he genuinely had no worries.
After working with me for a long time, Han had grown quite bold.
**
After Chuseok in 2010, the year-end atmosphere began to settle in.
While the end of the year usually eased people's minds, the mood at Taewoo Group was more like walking on thin ice.
The head of the Planning Office had come to report the third-quarter results, and his eyes were half-dead as he began his trembling presentation.
"Taewoo Electronics, Semiconductor, and the IT division have achieved their highest sales since the company's founding. Taewoo Entertainment is also performing steadily."
"Let's move past the reports of well-performing affiliates."
"Taewoo Construction's situation isn't very good. The construction industry has frozen since the Lehman crisis. Domestic construction orders have dropped significantly, and over ten companies among the top 100 construction firms have gone out of business. The outlook is grim."
The construction sector was enduring the worst year it had seen in decades.
Some firms managed to hold on with hope, but next year's projections were equally bleak, causing a surge in closures.
"But isn't Taewoo Construction doing okay? They're handling the new headquarters, the financial hub, and even Apple's new building projects, right?"
"Although we have many projects in hand, preventing losses for now, continuing economic downturn will make it difficult. According to the Economic Research Institute, the real estate slump is expected to persist at least until 2013."
With the projects currently secured, the company could hold out for at least three years.
But if the real estate slump lasted until 2013, profits would become increasingly difficult to maintain thereafter.
"Since real estate prices continue to fall, apartment construction will likely slow down."
"Not only new apartment construction but also redevelopment projects have stagnated. Unsold apartment units are piling up, causing some new projects to be canceled. Financial institutions are also hesitant to take on real estate project financing."
In unsold units, construction firms ultimately bore the losses.
Even so, from a financial institution's perspective, taking on project financing amid mounting unsold units remained a heavy risk.
"That issue can be handled internally by Taewoo Group. Why not start the apartment construction using funds from Taewoo Securities or Taewoo Group headquarters instead of relying on financial institutions?"
"Taewoo Group could provide the funds to begin construction, but wouldn't that place too much of a burden on the company?"
"If unsold units are a concern, we could even implement a post-sale system."
"By post-sale, do you mean selling the apartments only after construction is complete?"
"Of course, I'm not suggesting we do that immediately. We can monitor the situation until next year, and if conditions remain unfavorable, that approach could be considered."
Apartment prices were ultimately destined to rise.
Although unsold units were currently piling up, once a boom cycle returned, sales would inevitably occur, and prices would increase beyond current levels.
As long as construction funds were secured, the project was guaranteed to be profitable. By around 2012, sufficient capital could be raised by leveraging markets in Japan and Europe, leaving no real risk.
"Even if Taewoo Construction receives support, the bigger problem lies with Taewoo Trading. Specifically, the e-commerce division, 'Rocket,' is experiencing rapidly increasing quarterly losses. This quarter alone recorded a deficit of 400 billion won, and next year's losses are expected to exceed one trillion won."
Taewoo Trading, the electric vehicle division of Taewoo Motors, and the recently acquired companies—all were seeing losses grow every quarter. Profitable affiliates were covering these deficits temporarily, but the trend was clear.
Yet, I wasn't concerned.
By the start of 2011, there would no longer be any need to worry about funding.