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CH408 | Heir
🕑 Added 2025-09-04 16:42:19 +0000 UTCThe meaningless back-and-forth dragged on for more than twenty minutes.
Jerry Wang kept laying out the cards he held, trying to figure out what I wanted.
Only after I repeatedly shook my head did he finally bring out the card of charter fees.
“Taewoo Group hasn’t entered the shipping industry, so I don’t know if you’ll care, but the charter fees contracted with Korean shipping companies can be renegotiated on my end.”
“Do you have such authority, Mr. Wang? Isn’t the company contracted with the Korean shipping firms Seaspan? As far as I know, its representative is from the Washington family.”
The Washington family.
They were active in Canada and the United States.
The founding chairman, Dennis Washington, was wealthy enough to frequently appear on the rich lists published by financial magazines.
“Seaspan was co-founded by me and Kale Washington, the Washington family’s eldest son. I have that level of authority.”
“I see. Then, may I propose something interesting?”
“What kind of proposal?”
“I understand Seaspan and Hyeonjin Shipping still have a charter fee contract worth over three billion dollars.”
“From our perspective, that makes them a very valuable client.”
Of course they were valuable.
Hyeonjin Shipping had signed a long-term contract when charter fees were at their peak.
Now, Korean shipping companies were paying almost ten times more in charter fees, with most of their revenue swallowed by those costs.
The shipping companies did the work.
But the profits went to the shipowners, and Seaspan was the largest among them.
“Korean shipping companies have been pushing for charter fee renegotiations. I assume you had no intention of agreeing?”
“In fact, we have absolutely no plans to renegotiate with Korean shipping companies. At a recent board meeting, it was decided that even if they go bankrupt, the current contracts will remain in force.”
The shipping industry was more complicated than it looked.
It was a sector where cartels were firmly entrenched, and for the sake of those cartels’ profits, they could push the entire South Korean shipping industry off a cliff.
“So are you saying you can renegotiate charter fees with me?”
“I can’t lower them much, but I could give you about a ten percent reduction.”
There it was—the highway robbery.
They were already charging more than ten times the original charter fees, yet all he offered was a ten percent cut.
Of course, Seaspan itself wasn’t the one under short-selling attack.
It was Jerry Wang’s Chinese shipping company, where he was co-CEO, that was being hit. Still, his negotiation terms were miserly.
“I told you, didn’t I? I’d give you a very interesting proposal. If Hyeonjin Shipping goes bankrupt or is sold off, I’d like to renegotiate at half the current price.”
“Are you saying Taewoo Group is planning to acquire Hyeonjin Shipping?”
“At the moment, I have no such plans. But if Hyeonjin were to go bankrupt, I might take an interest. I’m making this proposal in preparation for that possibility.”
Jerry Wang fell silent for a moment, lost in thought.
From his perspective, it wasn’t a bad deal.
No money was being lost right now, and the chances of Hyeonjin Shipping going bankrupt at this stage were slim to none.
Hyeonjin was the backbone of South Korea’s shipping industry.
Would the government really just let such a company collapse?
That was probably what he was thinking.
“Very well. If Hyeonjin Shipping goes bankrupt and Taewoo Group acquires it, I agree to renegotiate the charter fees at fifty percent of the current price.”
“Just to be clear—are you able to make this decision on your own without consulting the Washington family?”
“This is well within my authority. And the Washingtons wouldn’t want to pick a fight with Taewoo Group anyway.”
The Washington family wasn’t just in shipping.
They were involved in railroads, highways, and logistics across Canada and the United States.
You could practically call them an American conglomerate. They had nothing to gain from creating bad blood with a company like Taewoo Group, which was also expanding into the U.S.
Of course, that was only my and Jerry Wang’s view.
What the Washingtons themselves would decide was another matter.
“If we sign this contract, I can persuade the short-selling firms to halt their attack—at least against your company, Mr. Wang. But beyond Wall Street, if others decide to go after you, that’s outside my control.”
“Most of the shorts targeting us are Wall Street firms. If you can manage that, it’s more than enough for us to hold out.”
“Then when can we finalize the contract?”
“Let’s sign it today. I’m the CEO of Seaspan myself, so there’s no need to doubt the contract’s validity once my signature is on it.”
The Washington family might be the real power behind Seaspan, but on paper, Jerry Wang was its chief executive. That meant there was no reason to question the legality of the contract.
Problems could always arise down the line, of course.
But those would be Wang’s to deal with. As far as I was concerned, once signed, the contract would be binding.
***
Two days later, I returned to Korea.
The atmosphere at the airport was noticeably different, no doubt because of MERS.
“Korea definitely feels unsettled right now.”
“The MERS situation is getting more serious. The number of confirmed cases hasn’t passed one hundred yet, but socially it’s already being treated like a pandemic on the level of swine flu.”
MERS wasn’t highly contagious.
But with a fatality rate over twenty percent, it provoked fear and let rumors spread like wildfire.
“Population flow is clearly down, and nearly everyone’s wearing masks.”
“Still, the government hasn’t declared emergency holidays or recommended remote work.”
“So the public fear is out of proportion to the actual damage.”
For most office workers, getting to work still took priority over fear of MERS.
Day-to-day life hadn’t changed much despite the noise.
What had shifted was public trust—government approval ratings were sliding, and distrust was building.
“Chairman, we’ve arrived.”
I had been talking with the planning director when we reached Financial Tower.
Taking the private elevator up to my office, I found Vice Chairman Han waiting for me.
We stepped inside, sat down on the sofa, and began.
“Let’s hear the situation report.”
“As you instructed, short-selling against Jerry Wang’s company has been suspended. All financial firms within the tower have complied.”
“There was no pushback?”
“None at all. Compared to other sectors, shipping isn’t a very lucrative target. Everyone agreed without objection.”
Half water, half fish.
That was the state of the Chinese stock market right now.
Almost any stock you shorted brought in profit. There was no reason to risk everything on shipping companies alone.
“From August, prices will fall even harder. So push a little more aggressively than now.”
“The prevailing view at Financial Tower is that the explosive decline is over. Prices have dipped these past few days, but the mood is that the market has stabilized.”
Through June and July, Chinese stocks had traced a steady downward slope.
But once August arrived, they started swinging up and down, holding at a certain level.
“So the news of the yuan devaluation is what’s propping up the market.”
“Correct. The devaluation is expected to begin around August 10. That’s why people are saying they need to close their shorts before then and lock in profits.”
“We’re not pulling out. If other firms want to close, let them. We’ll keep shorting until January next year. Settlement will be in February.”
The market would keep sinking through January.
Once the trade conflict between Korea and China erupted next year, there would be even more to strip away.
“But isn’t it risky to have capital tied up for that long?”
“There’s nowhere else to put it right now, so no reason to rush profit-taking. If you’re really uneasy, liquidate in September and re-enter at year’s end.”
“Then we’ll close about thirty percent in September and reinvest at the end of the year.”
After meeting Ri Kang, I was even more confident about pressing the shorts.
As long as the lobbying kept the higher-ups satisfied, they seemed willing to ignore short selling altogether.
August had finally arrived.
On the 11th, the Chinese government announced a devaluation of the yuan.
Cheaper yuan meant bad news for the Korean economy.
Manufacturing, in particular, lost competitiveness against Chinese exports, and the blow to trade was inevitable.
Two uneasy weeks passed.
Then, on August 24, the Chinese stock market plunged again.
“Chairman, the market fell 8.5 percent in a single day. About 780 trillion won in value evaporated.”
“The firms that closed their shorts early must be clutching their stomachs now.”
“Roughly 60 percent of Financial Tower’s firms followed us and stayed short. But close to 40 percent cashed out.”
I could set the table.
But eating was up to each firm.
If they chose to lay down their spoons before the main course arrived, what more could I do?
“The firms that pulled out are preparing to jump back in, aren’t they?”
“Since last night they’ve been coming to me to apologize. They say they’re raising fresh capital and will short again.”
It was its own form of discipline.
I had never ordered them to stop shorting.
I simply told them they were free to cash out if they wanted.
Now they understood.
If they stopped on their own, without my say-so, they risked missing out on enormous gains.
They’d learned that lesson the hard way, and they wouldn’t make the same mistake again.
“And if 780 trillion vanished in a day, the short profits must be significant.”
“Yesterday alone, Taewoo Securities made close to 10 trillion won.”
“Not bad at all.”
In truth, the returns weren’t all that high.
Considering the capital Taewoo Group had set aside for this short-selling campaign, the profits were far from satisfying.
“The volume available for shorting was limited, so the gains didn’t come out that large. But we’re also making money through the yuan offensive led by Quantum Fund.”
“With the Chinese government continuing to devalue the yuan, those profits must be piling up nicely.”
“We haven’t closed the positions yet, but even just from the shorts, we’re looking at over 100 trillion won in profit.”
Finally, an answer worth hearing.
Roughly 100 billion dollars in profit—enough to prepare for what was coming.
And with the additional earnings from the oil war, it was hard to imagine Taewoo Group’s coffers running dry anytime soon.
“Until the end of the year, you may manage the funds as you see fit, Vice Chairman Han. But once year’s end arrives, you must resume shorting without fail.”
“I understand. And there’s one more piece of good news!”
“What is it?”
“Centurion has nearly succeeded in developing a MERS treatment. They’ve already completed the first clinical trial.”
I shot up from my seat.
The news of Centurion’s treatment was more exciting than the 100 trillion won in short-selling profits.
“I need to head to Centurion right away!”
