[Korea Development Bank Discloses: Considering Sale of Korea Electric Power Shares!]
[Giving Up Control of a Public Enterprise? KDB Reportedly Recently Discussed a 10% Block Deal with Pension Funds!]
[KDB: “Claims Raised in Some Quarters About Giving Up Management Control Are Mere Speculation; Pension Funds Are Friendly Shares No Different from KDB”]
[Industry Expert: “It May Be Rational from a Managerial Perspective, but from the Public’s Perspective There Are Many Concerns”]
[Mirae Securities: “Sale of KEPCO Shares That Had Caused Major Losses Expected to Improve KDB’s Financial Statements; Threat to Management Control Likely Limited Due to the Special Position of Pension Funds”]
[Theme Stocks of the Week: State-run Banks!]
[Is the Era of Autonomous Management Opening for State-run Banks? On KDB’s Unconventional Move, Industrial Bank of Korea and Others Close Up Over 6%!]
The KDB equity-method issue, which had seemed likely to take years at the earliest, was wrapped up in less than a month.
Korea Development Bank persuaded all the relevant laws and institutions to revise the equity-method rules, and, perhaps afraid we might change our minds, quickly concluded a 10% block deal.
With this, the government’s stake in Korea Electric Power had shrunk sharply to 41%, but that did not mean management control was in danger.
Since the Korea Piggy Bank Pension Fund purchased that exact volume, the government’s stake was effectively close to 61%.
[Opposition Party Fiercely Protests!]
[Opposition: “A Very Firm Will Not to Raise Electricity Rates During This Term!”]
[Opposition Leader: “Are They Using the People’s Retirement Funds to Plug Electricity Rates Again? Does the Ruling Party Plan to Pass KEPCO’s Deficit on to the Next Administration Again?”]
Once the sale was officially concluded, the opposition party threw itself on the floor.
Because our pension fund had not merely acquired shares; it had also swept up all the financing funds KEPCO was raising, including new bonds.
KEPCO had posted a surplus for eight consecutive quarters, but there was one reason it still needed continuous financing. Because electricity rates would remain frozen going forward.
“Does this make any sense?”
The day after I returned from concluding the block deal with KDB.
Department Head Oh lowered his head and pinched the bridge of his nose.
“We buy their stocks, buy their bonds, block dividends... What are we, the KEPCO supporters’ club?”
“Well... there’s no helping it. If we don’t buy their stocks and bonds, KEPCO has no way to raise funds. We need to block dividends as much as possible too so they can use the money to repay debt right now.”
“What I’m saying is, why do we have to pour twenty trillion won of our hard-earned money into a company with so little hope? Judging from the Blue House’s reaction, they have no intention of raising electricity rates during their term. Then in five years they’ll be back in the red. How does that look promising in any way?”
“They’ll raise them.”
“What?”
“They must have a plan. Right now they have no choice because of people’s livelihoods, but the Blue House won’t ignore this issue throughout the entire term.”
Saying that, I quickly left my seat.
“Department Head, please trust me. KEPCO’s prospects are extremely bright!”
“What kind of nonsense are you spouting...”
“I’ll be going to South Jeolla for a bit. I have a meeting with KEPCO’s chairman today. I’m sure they have a plan, so I’ll bring back good news.”
With that, I quickly fled to the KTX station.
*
“Welcome. I’m Park Bongsu.”
Korea Electric Power headquarters in Naju, South Jeolla Province.
When I squeezed out time from my busy schedule and came down to KEPCO headquarters, Park Bongsu extended his hand to me with a lukewarm expression.
“I’ve heard. You acquired shares from KDB? Then what, should I call you our major shareholder?”
“...I’m Team Leader Lee Sejun. Please address me however you’re comfortable.”
“Ah, sure, nice to meet you, Team Leader Lee. Since we both seem to know how things work, I’ll speak comfortably too.”
His first impression had been bad, but his manner of speech was even worse. At my words telling him to be comfortable, he treated me like an assistant manager at his own company.
I was angry enough for my fists to clench, but I had to endure it.
Like every chairman of a public enterprise, Park Bongsu was someone who had rendered distinguished service in the current president’s election. After being pushed aside for a ministerial post, pushed aside for a nomination, and pushed aside for a party position, he had no choice but to be exiled here.
Still, the fact that he had secured the chairman’s seat at a public enterprise meant he had considerable pull. When he was in central politics, every public official in Korea must have bowed and scraped before him, so someone like me could only look like a minnow to him.
“By the way, of all days, why did you have to come today?”
“...Pardon?”
He pointed to the dazzling suitcases behind him.
“I’m leaving for a training trip to Europe today. Because of you, I had to delay my flight for no reason. If it’s something ordinary, just talk to our president or executives. It’s not like I’m the one who handles practical affairs anyway.”
“I apologize. But this is something I absolutely must discuss with you directly, Chairman.”
“Phew... Fine. You seem to value procedure more than you look. But let’s finish within twenty minutes. My flight schedule is extremely tight.”
I turned my head toward the executives sitting beside him. Judging from their expressions, it seemed he was always like this.
Since dragging this out didn’t seem likely to do me any good, I handed over the documents and got straight to the point.
“Chairman. Please raise the electricity rates.”
“Wh-what?”
“I won’t take issue with KEPCO’s recent bonus party. Eight consecutive quarters in the black, and an A in the Ministry of Economy and Finance’s management evaluation—those are certainly enough to celebrate. But if you freeze electricity rates again, how long do you think this surplus will last?”
“Look here.”
“As you know, KEPCO has a great many tasks piled up before it. The current 37% share of coal-fired power generation must be replaced with renewable energy, and in the long term, you must repay two hundred trillion won in debt. If you examine them one by one, every single thing costs money. You don’t have the luxury to freeze electricity rates.”
No sooner had I finished speaking than his face changed completely.
“Well, now... The young man is letting his enthusiasm get ahead of him. Do you not know that electricity rates aren’t decided by KEPCO’s chairman, but by the Blue House?”
“I know. That’s why I’m asking you to raise your voice.”
“What?”
“Whatever post you may have held in the past, aren’t you the chairman of KEPCO now? Then you should convey the organization’s difficulties to the government. The only person who can do that is you, the representative, Chairman.”
Bang!
“You really keep scraping at people with your words, don’t you? If we raise electricity rates, what about people’s livelihoods?”
“Why is KEPCO’s chairman worrying about people’s livelihoods?”
“That’s what the chairman of a public enterprise does! If this were a position where all I had to do was make money, do you think the country wouldn’t have raised electricity rates?”
“You absolutely may do that. Think only about making money.”
“Wh-what did you say?”
His eyes burned as if he wanted to devour me, but I did not back down and met his gaze.
“Chairman. KEPCO still has no money. To repay all two hundred trillion won of debt, wouldn’t even eighty consecutive quarters in the black be insufficient, let alone eight?”
“Why does this bastard keep talking about deficits—”
“You have to repay the deficit before you can do anything. Chinese-made renewable energy has seized 75% of the global supply chain, so what can we do? We have to replace coal energy with renewable energy by 2030. Are we really going to use nothing but Chinese-made parts?”
Korea, having been judged a developed nation by the UN, had spent the past ten years struggling blood and tears to reduce carbon emissions.
We cut down mountains to install solar panels, and wherever there seemed to be a bit of wind, we put up wind turbines, trying to gather the energy of the entire universe.
But this was the Korean Peninsula, a place where every business related to soil, climate, and environment was inefficient.
When we cut down mountains, soil and debris covered the solar panels, and when we put up wind turbines, the wind stopped only in those places. Because of that, after going round and round, we always had no choice but to return to nuclear power.
But we all know. Considering the risks of nuclear power plants, we cannot replace all our energy with nuclear power.
In the end, we must establish sustainable renewable energy businesses suited to our climate, such as hydropower, wind power, and solar power, but the road ahead is impossibly distant.
Every time the government launched a renewable energy project, Chinese-made parts flooded our market. Ultimately, domestic technology must achieve not only performance but also cost innovation, and that was not something that could be done with words alone.
Massive R&D investment—without that, it could not happen.
“We need money. Repaying the deficit is only natural, and at the same time, we must secure our own independent technological capability. That requires an enormous amount of research and development funding. The reason we invested twenty trillion won was because we were investing in KEPCO to do precisely that. So KEPCO should show some sincerity as well.”
In truth, we were rather late.
Korea was a country that ranked in the upper tier of the OECD in most industries, but for this renewable energy sector in particular, it lingered near the bottom of the OECD.
After listening to me for a long while, he opened his mouth.
“So what you’re saying is, you don’t care if ordinary people weep tears of blood, just make money? So KEPCO’s share price goes up?”
“Chairman.”
“No, if that’s how it is, why don’t you become president instead? Try persuading the people. Tell them electricity rates have to be raised further to repay the deficit and grow the renewable energy business too, so everyone should participate. If you become president like that, appoint me as KEPCO chairman again. Then I’ll do it.”
I clenched my fists tightly and looked at him.
Persuading the political world, and public opinion as well, would not be easy... In other words, he was simply saying he would not do it.
“...Chairman. If we fail to secure renewable energy technology even now, demand for Chinese-made parts will only grow further.”
“I hate the idea of China holding us by the leash in energy security too. So you should join our party and run in the next presidential election. Try persuading the people with that sincere voice of yours.”
After sneering a few times, he rose from his seat.
“How about it? You can’t, can you?”
“...”
“Humans really are selfish creatures. They always tell others to do what they themselves can’t. Tsk, tsk—”
“...”
“I’m sorry to our major shareholder, but I have a business trip to Europe today, so I’ll be going. Let’s pretend I never heard what we discussed today.”
As he hummed and pulled his suitcase, I said to him.
“Chairman. Aren’t public utility fees something both sides should shoulder, regardless of political camp? If you freeze them because people’s livelihoods are difficult, won’t the next administration be left holding the bag alone?”
He stopped abruptly and looked at me askance.
Then, with a face utterly devoid of laughter, he drove a dagger into me.
“Don’t get cocky, you bastard.”
With that, he resumed humming and headed for Europe.
I felt bleak.
The age of renewable energy is an unavoidable future. But with our current technological capability, we would once again have no choice but to use Chinese-made parts. There were no end of such accumulated tasks, yet that man did not seem to have any particular intention of repaying the deficit either.
As expected... threats are easier than persuasion.
“Vice President.”
After he left, I turned my head toward the executives who had been sitting there all this time like sacks of borrowed barley.
“Please hand over Korea Electric Power’s financial statements.”
“By financial statements... they’ve already all been disclosed.”
“They don’t include the details. Please hand over the detailed records, including employee attendance, corporate card usage, and company vehicle operating logs.”
“P-pardon?”
“If there are any materials without supporting evidence attached, you’d better attach it quickly. Hand everything over without omission.”
“T-Team Leader. That’s not possible. There are proper procedures for a corporate accounting audit.”
I said with an expressionless face.
“What I want right now is the attendance record of exactly one person. But if we follow formal procedure, I’m thinking I might review the attendance records of all the executives.”
“...Pardon?”
“I hope you understand.”
With that, as I left KEPCO headquarters, I picked up my phone.
“Yes, Ms. Meilin. It’s me. It’s been a while, hasn’t it? Haha... It’s nothing else, but I’d like to ask a difficult favor. I’m going to send you an email, so please make sure to check it.”