[207]Securing a location 4
On the morning of March 14, 2003, the Financial Supervisory Commission’s Policy Director 1 came out of the Yeouido Mountain Bank Capital Building, and his face was as pensive as the cloudy weather.
While investigating SK Global’s accounting fraud case, he discovered a problem that could shake the entire financial market.
He inspected the fund containing the bonds of the SK Group as if looking through a microscope, and found it strange that the size of the redemption request was broad compared to the size of the fund.
And it was discovered that the cause was the credit card debt.
Credit card debentures are short-term funds borrowed by credit card companies to pay the card bills used by customers instead. The credit card itself is the link in the debt.
Already from the second half of 2002, the FSC was watching with uneasiness due to excessive competition and a sharp increase in credit defaulters.
However, since there were many bonds based on assets, we just judged that there would be no major problem if there were no special variables in extending the maturity of bonds.
However, with the outbreak of the North Korean nuclear issue, foreign short-term borrowing was suspended, and the financial market unrest faced an out of control crisis due to SK Global’s accounting fraud incident.
The size of credit card debt was known to be around 50 trillion, but as a result of an investigation by the FSC, it was no longer possible to stay still when it exceeded 90 trillion.
The financial authorities held a financial policy meeting presided over by the Vice Minister of Finance and Economy at the Bank Hall in Myeong-dong, Seoul.
The urgent meeting passed through the night, and on March 17, credit card companies announced comprehensive measures.
The countermeasure on this day was to support financing by partially easing credit card regulations on the premise of credit card companies making intensive self-rescue efforts and measures to improve their balance of payments.
The problem was the card company’s intensive self-rescue efforts.
The word self-rescue includes pressure to reduce debt, even if it means pouring company money into it.
However, chaebol families value their wealth more than the company. The company’s money and government support funds were useless to prevent credit card companies from going insolvent, but with no one willing to pay for their own money, the worsening of the situation was almost certain.
“What about short-term debt?”
“I’m barely making up for it with the surplus funds from affiliates, but I can’t last for a few days.”
“As a temporary measure, we have reduced the limit on cash advances and card use. However, the cash advance will have to stop next month. I’m short on cash.”
Vibrator vice president rubbed his forehead. I thought I was sweating, but I was wrong.
Since I was in charge of heavy industry, I had the ability to detect changes in the market following long-term economic trends. However, it was really difficult to endure the situation of having to roll money every day at a financial company like a credit card company.
“We need to bring in more affiliate funds. Or a big problem next month…”
“No. We can’t push our stable affiliates into financial difficulties by lending money to those who try to block them with credit cards!”
“But when cash advances stop, things get out of hand.”
“That’s right. If the use of Sunyang Card is suspended, it will adversely affect the stock price of the credit card company as well as the entire Sunyang Group.”
As executives raised their concerns, Vice Chairman Vibrator stopped rubbing his forehead.
“What are you doing? Does the agenda for today’s meeting warn me of danger? Aren’t we gathered to come up with measures to overcome that danger?”
Short-term foreign debt and credit card debt are plausible names, but they are debt anyway. You owe a debt and the time has come to pay it off. Paying off debt is the only way to pay it off.
Executives are squeezing money to pay off the debt, but they have no other options, so there is nothing to say but a warning.
There is no way to put out an urgent fire. All you have to do is take out the money that the vibrator vice president has hidden here and there. Even if you can’t do it, it will be hundreds of billions. But no one can get this out.
Vice Chairman Jin Dong-gi looked at the executives who were silent and said with disapproval.
“Do-joon… no, what about Sunyang Life Insurance’s bonds?”
It’s the part that worries him the most, so I have to point it out.
“The repayment of 300 billion won is two months away. This must be extended. To be honest, reimbursement is impossible.”
As expected, only the most extreme choices remained.
At this time, the voice of an executive was heard from the corner of the conference room.
“Vice President. Now, I want to discuss the self-rescue measures the government said.”
“what?”
“We need to increase the capital of credit card companies. Unless stability is guaranteed, all countermeasures are temporary measures, and one day the worst case scenario is to stop using the card.”
Other executives were not ignorant, but it was burdensome to speak in a public setting.
Sunyang Card has no stake in affiliates. Increasing capital does not help the group’s dominance at all. Rather than increasing the capital of such a company, it is better to increase the capital of Sunyang Heavy Industries to further solidify Vice Chairman Dong-gi Dong’s control.
And lending heavy industry funds to credit card companies and putting out urgent fires is the answer Vice Chairman Vibrator wants and also his thoughts.
However, the ignorant executive urged the vice president to answer.
“There is faith in the name Sunyang Group. There won’t be much difficulty in expanding the capital of Chunyang Card.”
“Hey, that story will come later…”
The executive sitting next to me stopped me with a wink, but it was already too late.
“okay? how much do you need Tell me what you think.”
“Four hundred billion.”
“Is that money okay?”
“yes. Stable fund management is possible as well as putting out urgent fires. Is a quadruple increase sufficient…”
“Let’s spread a face value of 5,000 won to 20,000 won?”
“Since it is the Sunyang Group, I don’t think there is a problem. With 100 billion won in capital and 300 billion won in capital surplus, a total of 400 billion won can solve this difficulty.”
The executives did not hide their nervous expressions, but they were relieved to hear the opinions they wanted to express openly on the conference room table.
“However, Vice Chairman Sunyang Life Insurance’s bonds of 800 billion won must be extended. Even if more than 400 billion won comes in, there is no way to block the bonds of Sunyang Life Insurance.”
A person who doesn’t notice doesn’t notice until the end. If you had read Vice Chairman Vibrator’s expression even a little, you shouldn’t have said the last word.
“Now, since I turned everything upside down, I don’t think I have anything more to say… Shall we end the meeting?”
Vice Chairman Vibrator left the meeting room without looking back. When everyone was left in the conference room, his voice pierced the conference room.
“Let the card boss see me.”
The president of Sunyang Card ran out of the conference room like a sprinter. I heard a cold voice when I managed to get close to the vice president of the vibrator who was striding.
“I don’t want to see that bastard from tomorrow. And I will do something about the Sunyang Life Insurance bonds, so you, the president, will take care of the rest.”
I know who that bastard is without even saying his name.
If the capital increases by 100 billion won, the stake will fall below 30%, and Sunyang Card’s dominance will pass.
Owners of chaebol families abandon their companies rather than lose management rights.
Aren’t they the kind of people who never accept the sight of a landlord degenerating into a dead man?
“yes. Vice President.”
The president of Sunyang Card knew that his life was short. It may be the first time that the Sunyang Group goes bankrupt.
I bit my lip involuntarily, fearing that I might be dishonorably retired.
* * *
“You all know by now how absurd commercials like < Be rich all of you > or < Father said, enjoy life > were ridiculous, right?”
“Even if I know, I forget. If I remembered everything, would these swindlers still be in Korea?”
Oh Se-hyun showed a cynical smile.
“Now, tell me honestly. Did you intuit this situation?”
It’s not a gut feeling, it’s something I’ve seen with my own eyes. But the answer was different.
“It’s a business with growing debt. It’s not like this, but I just thought that leading the company was a daunting task.”
“Anyway, thanks to that, the bomb in my arms is gone. It’s luck.”
“I intend to bring it back when the bomb is gone.”
“Are you okay?”
“A credit card company is like a bank that lends money first and collects interest. Wouldn’t it be a business to swim on the ground if you were careful about issuing cards and limiting them?”
Banks lend money after thoroughly examining each customer who wants a loan and securing collateral.
Credit card companies do not have to act like banks. This is because most loans are for a month and are small. If the customer’s credit rating and income are carefully considered when issuing the card for the first time, the risk of loss drops sharply.
Why would you give up on this kind of business?
“Wouldn’t it be easy to get the cruiser card back?”
“There is no need to rush, but you have to stock up on falling stocks. And am I not a huge creditor? There are many ways.”
It is easy to get back only the credit card company. Difficulty is a win-win.
Vice Chairman Jin Dong-gi has to say sorry to his older brother, Vice-Chairman Jin Young-ki.
To do that, I have to do something toxic… but it’s not difficult.
And the day came right away. It meant that the fire that fell on the card company was hot.
“Uncle. that’s troublesome My nose has grown to three.”
“what?”
The vibrator vice president opened his eyes wide and started glaring at me.
“The money line was blocked due to the credit card crisis. Life fire… All clamor. It’s serious enough that I’m looking into short-term borrowing right now. Seriously, did you borrow money from your father’s hospital?”
Cash loans, which were only 48 trillion won in 1999, soared to 268 trillion won as of the end of last year. As soon as the credit card company lowered the credit limit, 3 million people with bad credit poured in.
The Korean economy has already suffered from arteriosclerosis. There are not many companies left who will shout that there is no problem.
“The insurance premiums that came in every month are about to be cut in half. If my uncle doesn’t sort out the debt, we’ll be in big trouble as well.”
He trembled as never before and tossed out the thick papers.
“Take a look. All of the subsidiaries were frozen because the funding plan collapsed. You know, aren’t we all about money business? My uncle is in the heavy industry, so he must have a better financial situation than us.”
“Don’t talk. They are stealing money from other affiliates and sticking it in their credit cards. I’m going to get sick of this.”
My uncle’s toughness is also not common. no, isn’t this bullshit?
“Anyway, let’s watch a little longer. I don’t know if the government will provide funding…”
“No government support. It happened as soon as the new government came into office. That’s the price to pay for swipe cards and revelry. I don’t have the guts to ignore public opinion criticizing moral hazard.”
Are you this smart?
If the bond is delayed until the end of maturity, it can really hit the back of the head, but it shows caution in preparing in advance.
“Then are you going to stay like this? I can’t stand it unless my uncle settles our debt. In the meantime, I just passed it even if I didn’t take care of the interest on the bond properly. This is the limit.”
Vice-Chairman Vibrator did not hide his embarrassing expression. Looking at that expression, he said softly.
“How about borrowing some money from outside?”
“Do-joon. If I had a place to borrow money, do you think I would say sorry to you, my nephew? Even the bank stumbles over the card.”
“No matter how hard it is, I said that I will go to the rich 3 generations. Isn’t there a place where you can easily borrow a few hundred billion won?”
Suddenly, the Vibrator Vice President’s eyes twinkled.
“where? Do you have a place with enough money? You’re not talking about the Myeongdong moneylenders, are you?”
“If you go all the way to Myeong-dong, you’ve gone where you want to go. Not there… isn’t your uncle there?”
He lifted his finger and nudged it upwards.
“big? older brother!?”
Vice Chairman Vibrator frowned at once.
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