Story of a Big Player from Gangnam

Chairman Lee stood up after taking a piece of Gimbab.

“How come you aren’t having more, sir?”

“Oh, I just need to go to the bathroom. I might have a minor prostate problem since I’m aging. I need to go to the bathroom pretty often these days.”

Chairman Lee went into the forest towards the mountain to pee. Manager Gweon said while looking at Chairman Lee disappearing into the forest.

“I was actually hitting on him when I saw his vacation home that is located not far from here.”

“Is it large?”

“Yes, it is. The land is probably over 1,000 pyung. I started admiring him when I saw that vacation home.”

“1,000 pyung? That large?”

Gun-Ho and Jong-Suk pictured a large luxurious house like a castle on a 1,000 pyung land.

They couldn’t ask Manager Gweon more about the vacation home because Chairman Lee came back.

“I can’t satisfactorily pee anymore, maybe because of my old age. Why didn’t you finish the chicken yet? You still have some left.”

“We are working on it, sir.”

“When I was young, I used to finish two chickens at once without any problem.”

Chairman Lee picked up one piece of Gimbab and put it in his mouth.

Gun-Ho was thinking of bringing up the topic about Mulpasaneop to Chairman Lee when Chairman Lee asked him first about it.

“President Goo, you said you wanted to acquire a company that went broke. Any update on it?”

“Actually, I was going to talk to you about it. That company started its court receivership.”

“Hmm, I see.”

“Once the court protects the company from creditors so the company could continue their business, they might be able to get the business back on its feet again, right?”

“Do you think they will be able to do that?”

“With the court’s help, they would be able to breathe and focus on their business again.”

“You are reading an economic newspaper, right?”

“Yes, I read it every day.”

“Then you see the advertisements about an M&A of a company that was doing the court receivership, right?”

“Yes, I saw those too.”

“How come those companies want an M&A even though the court was protecting them from creditors?”

“Maybe its president is sick and tired of being harassed by creditors, or he probably wants to retire and have a relaxed life without running a company.”

“No, that’s not what’s happening.”

Chairman Lee shook his head.

“That’s because selling the company is worth more than keeping the company.”

Jong-Suk who was eating a chicken wing with a pinch of salt asked,

“What does that mean, sir”?

“President Gun-Ho Goo, why don’t you explain to him?”

Gun-Ho was thinking of how he could put it in a way that Jong-Suk could easily understand when Chairman continued to talk.

“What was the name of the company that went broke?”

“It is Mulpasaneop, sir.”

“That’s right. Did you carefully look at their sales revenue? The company doesn’t generate revenue any longer.”

“I thought that was because of their debt.”

Chairman Lee clicked his tongue.

“I told you to study accounting five years ago when we had met at this fishing site. What did you see on their financial statements? Mulpasaneop wouldn’t be able to generate revenue even without paying for their debt. Their raw materials cost them too much. Their profitability is way too low.”

“That means that even if I could acquire that company, I have to do something innovative to radically change the way they conduct their business.”

“That’s right. If you can’t raise the sales, you have to lower the labor cost or find alternative raw materials to be competitive in the market.”

“But that company has high accounts receivable. Doesn’t that mean that they are still selling a lot of products but that they just haven’t been paid for those products by their customers yet? So those accounts receivable is their asset, aren’t they?

“You are stupid! Don’t you see those accounts receivable are not a real asset?”

“Ohhh, since they couldn’t reduce their debt, they just let the accounts receivable sit there too, and they just accumulated over a period of time because debits must equal credits.”

“Now you are talking.”

Jong-Suk said sulkily,

“I absolutely have no idea what you are talking about. I will just keep eating the chicken.”

Manager Gweon added to what Jong-Suk said,

“Haha. I’m with you, Mr. Jong-Suk Lee. Let’s just eat.”

Chairman Lee smiled.

“That’s one of the ways to live a happy life too. Sometimes, you just let things go that cause you a headache; that way, you could avoid painful matters in your life.”

“Whew.”

Gun-Ho, let out a deep sigh.

After having a cup of water, Chairman Lee asked Gun-Ho,

“What’s the matter? You seriously want to acquire that company?”

“Even though I desperately want that company, if the president doesn’t want to sell it, I wouldn’t be able to have it, right?”

“You can make him sell the company then.”

“I can do that?”

“You have to give him a reality check.”

“A reality check?”

“Let him realize that the longer he owns the company the more he will lose.”

Gun-Ho couldn’t fully understand what Chairman Lee said.

“Listen, Mr. Gun-Ho Goo.”

Chairman Lee called him Mr. Gun-Ho Good instead of President Goo this time. That sounded strangely friendlier.

“In order to make money, you have to be harsh sometimes. If you are soft-hearted, you can’t make money.”

“Where are you getting at?”

Jong-Juk was yawning; the conversation between Gun-Ho and Chairman Lee must have bored him. He then went to another fishing spot carrying his fishing gears. Manager Gweon also left the spot heading to his Genesis car. He said he wanted to take a nap there.

At the lake, Gun-Ho and Chairman Lee were left by themselves.

Chairman Lee continued to talk with a placid smile.

“When I was young, people used to tell me that I was a cruel man. I worked as a hard money lender at that time in Myeongdong Town. Whenever the merchants at Namdaemum Market couldn’t pay me the loan interest on time, do you know what I did?”

“Did you scold them?”

“I once went to one of the merchants’ home that was located on the top of a mountain in the Miari area, and took his household goods like a rice cooking pot.”

“Ha.”

“They all told me that I was a cold-blooded man. However, you have to remember this. When you desperately need money, there would be no one who would lend you money. Think of the days when you worked as a factory worker. When you really needed even just 100,000 won, you probably wouldn’t have found anyone who you could borrow that money from.”

“That… that’s very true.”

“When I heard that you made good money in investing in real estate in China, I smiled, because real estate investment requires seed money. And how could seed money be made in a short period of time? Especially when it was made by a person who was born to a poor family.”

“Umm… that… that was…”

“You don’t have to tell me. I know it wasn’t made in a way that you feel proud of. I did that too.”

Gun-Ho blushed. He was caught off guard.

“The economic ladder to climb up almost collapsed in Korea. If you are remorseful for the action you took in order to make the seed money, you can pay it back to society by helping others and doing the right thing as you live your life. I’ve tried it all my life even though I couldn’t really live that way. I regret the way I’ve lived.”

Gun-Ho swallowed his saliva without saying a word.

“You said you want to acquire Mulpasaneop, right?”

“Yes, I did.”

“Then get into that company as an employee.”

“Get a job at that company? I don’t think they would hire me.”

“They will. Ask them to give you a position like a vice president or managing director.”

“What?”

“Don’t talk with a bank or an accountant that handles the company’s work.”

Gun-Ho blushed again. He actually went and talked with Accountant Nak-Jong Lee who had been handling Mulpasaneop’s financial matters.

“I… I actually met with their accountant once. I learned the fact that the company was in the process of court receivership from him.”

“You don’t have to ask for help from the attorneys, accountants, or bank branch managers around the company. In a capitalist society, the person who has money is the person who is ruling society. You don’t ask those people for help, but you ask them to work for you like you rule over them.”

“I haven’t reached that level yet, sir.”

“Don’t be silly! You already have enough money to do it. That gives you great power to rule over them. You just don’t realize it yet.”

“What about getting a job in Mulpasaneop, which you mentioned earlier? What should I do to make it happen?”

“Go talk to the owner-president on your own.”

“Would he meet with me? He doesn’t even know me.”

“He is cornered already. Once a company starts its court receivership, its president is not treated respectfully as he used to be. He is probably feeling lonely and depressed. If you go tell him that you are a hard money lender with substantial funds, he would welcome you.”

“Do you really think so?”

“I’m certain. Do you know who will actually handle the company during the court receivership?”

“I saw two names on the court website.”

Chairman Lee smiled again.

“One must be someone who was appointed by the court, and the other must be the owner-president. That’s good. The power is currently moving from the court to the person who is appointed by the court. The power shift is happening right now. The president must be extremely lonely. Go talk to him directly; do not go through some third party to talk with him, but go directly to him by yourself.”

“Okay, sir.”

Gun-Ho bit his lips as he made up his mind about his next move to acquire Mulpasaneop.

“I feel sorry for him.”

“Huh? Who are you talking about?”

“The owner-president. He lost control over his own company, and he is facing capital reduction. That would make him feel extremely lonely.”

“What do you mean by facing capital reduction?”

“Once a company starts the court receivership, the court protects the company from creditors, and also the court reduces the owner-president’s shares of the company like a penalty.”

“Oh, I see.”

Gun-Ho thought that the world could be very cruel.