“Who did you say?”
The headquarters of Silchest Fund, located in London, England.
Because of an unwelcome visitor who had arrived without notice, CEO Stephen Burton had been forced to cancel his entire schedule for the day and head to the office.
“Yes. She says she’s an advisory director from Changcheng, a Chinese fund. Her name is Meilin.”
“Changcheng… Isn’t that the company Mingwei founded?”
“Oh, you know him?”
“We ate from the same pot back when we were at JP. But who is Meilin? The Mingwei I know would never take advice from anyone when making investments.”
Stephen Burton.
He, too, had once been a rising man at JP, and thirty years ago he had returned to England to establish his own fund. The Silchest Fund he founded was closer to a hunter than an investor.
As one of the leading names among activist funds, they intervened very actively in management, and in particular had always raised their voice on companies’ shareholder return policies. In Korea, they were already famous for having been deeply involved in the management rights of the Geumseong and Shalotte Groups.
“To be honest… we don’t know much either. But it does seem certain she was sent by CEO Mingwei.”
“Are they lovers?”
“I don’t think so. Of course, she is a young woman of considerable beauty… but what she brought up is far too enormous for that.”
That was why CEO Stephen Burton had canceled his entire schedule for the day and hurried back to the office. An enormous proposal had come from Changcheng Fund, and he could hardly refuse to hear it in person.
“Fine. I’ll have to meet her myself to know anything. Where is she?”
“Yes, in our main conference room.”
Stephen stopped briefly in front of the conference room, then opened the door.
“Good afternoon. I’m Stephen Burton, CEO of Silchest.”
His secretary’s description had not been wrong. When he opened the conference room door, a woman in office attire, her lipstick meticulously applied, was waiting inside.
She had clearly put a great deal of effort into her makeup and fashion, but it could not hide her youthful face.
“It is an honor to meet you as well. I am Meilin, advisory director of Changcheng Fund.”
“My apologies. This meeting was arranged so suddenly that I made an honored guest wait.”
“Not at all. I should be the one thanking you for making time for such a sudden meeting. Ah, and CEO Mingwei specially asked me to convey his regards.”
“Haha. So that fellow remembers me after all.”
“Yes. He said that when he was at JP, you were a senior he always looked up to. He asked me to be sure to tell you that it is a great honor in itself to be having a business meeting with you like this.”
“Is that so? Hearing such praise so suddenly makes me rather nervous. I wonder what sort of proposal you’ve come with.”
Burton disliked empty compliments, so as soon as he took his seat, he asked her to get to the point.
“Yes, CEO Burton. We sent an official letter from Changcheng. Have you had a chance to review it?”
“Of course. However… I did review it, but I can’t understand what on earth it’s supposed to mean. Could you explain it in simpler terms so I can follow?”
Meilin smiled.
“It means exactly what we sent. I understand that Silchest Fund recently sent a letter of protest to Daehan Electric Power regarding the freeze on electricity rates. Silchest’s stake in Hanjeon is about 3%, yes?”
“That is true, but…”
“From what we’ve determined, foreign ownership of Hanjeon is around 30%… I think it’s worth a fight. Please push forward a motion to dismiss Chairman Park Bong-su.”
CEO Stephen Burton let out a hollow laugh.
He had thought she was a beauty rarely found in the investment industry… but as expected, she was an utter novice when it came to investing. Did she know nothing about Hanjeon’s shareholder structure?
“My, where should I even begin explaining this… Director Meilin?”
“Yes.”
“It is true that Silchest sent Hanjeon a letter of protest, but that was merely choreographed sparring. A bit of pressure to increase dividends, that’s all.”
“So you weren’t sincere?”
“Isn’t that obvious? Daehan Electric Power’s largest shareholder is the Korean government, which holds 51%. Even if you gathered not only foreign capital but every Korean shareholder as well, a dismissal motion would be impossible.”
He spoke as though rebuking her, but the corners of Meilin’s mouth only rose higher.
“Your calculation is wrong. That largest shareholder recently sold 10% of its stake. It isn’t 51% anymore.”
“Ah, I see. My calculation was wrong. Since the Korea Development Bank transferred its stake to the NPS, that makes friendly shares 61%. In that case, isn’t it even more impossible?”
CEO Stephen Burton rose from his seat with a deflated expression.
“If this is pointless talk, please go back. I thought you’d come with some grand strategy.”
“CEO Burton. Why do you keep including the NPS stake as a friendly stake? From what I see, the Korean government’s stake is 41%.”
“What?”
Meilin handed him a bundle of documents.
“For some reason, I don’t think the NPS will act as a white knight. If you’re curious, please review these documents. Daehan Electric Power won’t be able to avoid raising electricity rates.”
“What kind of nonsense do you keep spouting! Even if we generously assume the pension fund stays neutral, do you think we can dismiss Hanjeon’s chairman? Electricity rates are public utility fees, so even a legal battle would be murky. And who would be responsible for the astronomical litigation costs?”
“That is why I’m making this proposal. If you fight over raising electricity rates, it will take ages. So just make an issue of corruption.”
“…What?”
Meilin smiled.
“If you don’t have time to review them, I’ll summarize. CEO Park Bong-su, who is currently occupying the chairman’s seat, is a mass of corruption. Just this year alone, five unscheduled overseas business trips, corporate card expenses at an all-time high… and among those corporate card expenses, a considerable number lack supporting documents. Hmm… Did he use that money to go to a gold shop and buy gold, or did he buy a handbag for his mistress?”
“Well… in any country, there are positions people exploit.”
“The corporate vehicle logs are quite a sight as well. The company is clearly in South Jeolla Province, but all the mileage records are in Seoul. In British terms, it would be like having your headquarters in Edinburgh, but all the driving records are in London. And also…”
“Wait, wait!”
Stephen shouted.
“So you’re telling me to seize on his weaknesses and pressure the chairman?”
“Yes. That’s the fastest way, isn’t it? For reference, Chairman Park Bong-su is a man with an excellent political sense. He’ll understand very well what it means for us to bring up these issues.”
The color drained from Stephen’s face.
He had thought she was a naive child who knew nothing of the world. The chairman of Hanjeon was absolutely not someone who could be changed. But the look in her eyes, having come with a solid scenario prepared, told him that she meant every word.
“N-no matter what, impossible things are impossible. I told you, the Korean government’s friendly stake is 61%.”
“41%.”
“…Fine. Even if we say the NPS is neutral, the government is still the largest shareholder. Even if all foreign capital gathers together, it won’t reach 30%.”
“Then the numbers fit perfectly. If the NPS’s 20% stake joins our side, we have a majority, don’t we?”
“W-what?”
Meilin rose from her seat with a smile.
“CEO Burton. How do you think we were able to obtain these attendance records, which no one but an insider could possibly know?”
“Wh-what do you mean?”
“If you are concerned about attorney fees, Changcheng will pay them on your behalf. That is all I have to say. I’ll look forward to a favorable answer.”
As she stood without a trace of lingering attachment, CEO Stephen asked urgently,
“Wait, Ms. Meilin! CEO Mingwei didn’t send you with this, did he? Who is it? Why did an insider give you these materials? No, if they were going to do that, why don’t they step forward themselves?”
“Mm… that person has certain circumstances. They say it would be difficult to reveal their identity.”
“Wh-what on earth does that mean?”
“CEO Burton, let’s just focus on our own work. I understand you’ve been invested in Daehan Electric Power for quite a long time. Are you going to end it with nothing but losses? If electricity rates go up and the financial statements improve, I think Hanjeon’s stock price will rise quite a bit.”
Meilin smiled and closed the door.
*
[Breaking News — British Activist Fund Silchest Pushes Motion to Dismiss Hanjeon Chairman Park Bong-su!]
[Concerns Become Reality… Is This the Signal Flare for Daehan Electric Power Privatization?]
[Silchest: “The Majority of Shareholders Are Suffering from Hanjeon’s Dirt-Cheap Electricity Rates! We Will Fix Everything, Starting with Reckless Management”]
[An Unusual Brawl… All Attendance Records of Chairman Park Bong-su Disclosed]
3 p.m. With roughly ten minutes left before the market closed, an enormous bomb exploded on the KOSPI.
Less than a month after the Korea Development Bank’s stock sale, Hanjeon had suddenly been hit with a lawsuit.
Silchest disclosed every piece of top-secret information it had somehow obtained, taking direct aim at Chairman Park Bong-su. With the release of these attendance records, the entire nation learned just how much of a cushy sinecure the chairman’s seat at a public enterprise really was.
—Team Leader Lee, to my office.
After receiving Department Head Oh’s call, I paid the utmost attention to controlling my expression as I opened his door.
“You called, sir?”
He held up his phone to me.
“Team Leader Lee. Right now, I have about twenty missed calls on my phone.”
“…Don’t answer them. Cambodian voice phishing is frightening these days, sir.”
“Don’t change the subject, you bastard! Ten of these are from the Korea Development Bank, and the other ten are from government officials. It’s obvious what they’re going to say. They’ll be trying to confirm our friendly stake, won’t they?”
“…”
“Before that, let me ask you something first. Did you, by any chance, instigate this situation from behind the scenes?”
I waved my hands in denial.
“That’s absurd, sir! How could I do such a thing?”
“Then why do all the pieces fit together so neatly? How does a private equity fund attack the moment the government’s 51% stake collapses?”
“…How would I know what an activist fund is thinking? Silchest has been involved not only in Hanjeon, but also in the management of major conglomerates like Geumseong and Shalotte. I know nothing about it.”
Department Head Oh spoke with a look of distrust.
“Fine. Sure, it probably wasn’t you. If electricity rates go up, the people will scream. Surely you wouldn’t have done such a traitorous thing.”
“…”
“Sorry. I think I suspected you too much.”
“…It’s all right.”
“Then I’m calling KDB. I’ll tell them our friendly stake is certain, so they don’t need to worry about this issue.”
I swallowed hard.
“Sir… but I don’t think Silchest’s demand is wrong.”
“What?”
“If Hanjeon’s deficit is left as it is, future generations will end up having to pay it back… Just because they saw a bit of profit, does it really make sense to freeze electricity rates?”
“That sounds like something politics should resolve. Why are you worrying about it?”
“…We hold a considerable stake too, don’t we? Not only that, but we also have to expand renewable energy by 2030. For now, we have no choice but to use Chinese parts, but we absolutely must secure our own independent technology. If we’re going to pay down the deficit and invest in R&D, every last ten-won coin matters. Silchest’s demand for a rate increase wouldn’t be bad for us either…”
Bang!
Department Head Oh glared at me with eyes blazing.
“I’ll ask you one last time. Did you instigate the motion to dismiss Hanjeon’s chairman?”