[Stock Disclosure - Changcheng Fund Acquires 3% Stake in KD Solution]
[Reason for Purchase: “Simple Investment”]
[Chinese Investment Firm That Led Short-Selling of Public Enterprises... Many Shareholders Voice Concern]
[Financial Supervisory Service: “The Short-Selling at the Time Was a Response to Manipulated Stocks; This Purchase Process Has Been Confirmed to Have No Issues”]
When Changcheng Fund’s stock acquisition appeared in the disclosures, a heavy meeting began at KD Group headquarters.
The executives of the Future Strategy Office, the group’s internal think tank, could not say a word and only looked at Nam Sanggi.
“It seems that man is serious after all.”
At last, Nam Sanggi opened his mouth.
Just as the bastard had said, Changcheng had begun buying shares. And of all things, it was KD Solution, currently the worst-performing and bleakest affiliate in KD Group.
A private equity fund could not be unaware of a company’s performance and outlook, so the whole sequence of events could only be understood as having been ordered from outside.
“Now, speak freely. What do you think of that man’s demand?”
As the Future Strategy Office executives watched one another’s reactions, one man raised his hand.
“Chairman. We cannot do it.”
He continued in a firm voice.
“Didn’t we already decide internally to withdraw from the solution business? To be blunt, I think it’s like fondling the balls of a dead child. We reached this conclusion after coldly evaluating how solid the Chinese supply chain is and whether our competitiveness can catch up. As originally planned, we should phase out renewable energy.”
No sooner had he finished speaking than the other executives rose up as well.
-Chairman, I think the same. It’s already been confirmed that Korea is barren ground for solar and wind power. Every business we tried only caused controversy, and it remained as a stain on the former president’s record. In a situation like this, is there any meaning in fostering renewable energy parts?
-That’s right! There’s already a very clear case of failure. Would the next administration try again? In my opinion, absolutely not.
The mood in the Future Strategy Office had already tilted.
The issue now was not China’s low-price offensive. Even the same parts became a disaster in cost-effectiveness the moment they crossed into Korea.
If solar panels installed in Xinjiang Uyghur produced 100 energy, the energy created by shaving down mountains in Korea could not even produce 50. In truth, not even 50. Every time there was a flood, sediment overflowed and struck the solar panels, so repairs cost more than the energy the panels produced.
For that reason, the former president’s renewable energy project had been cursed again and again.
“Then what should our KD Solution do going forward?”
-To be honest, I think it would be better to drop everything and jump into nuclear power even now. Securing nuclear technology would be faster than settling solar and wind power generators on land like Korea’s.
“Chairman, I think a little differently.”
Just as the mood of the meeting was tilting completely, Senior Director Park Sangyong raised his hand.
“While nuclear power may be groundbreaking for carbon reduction, we will not be able to replace all our energy with nuclear power.”
“Impossible...?”
“Yes. There are currently twenty-four nuclear reactors operating domestically, but to replace all 30 percent of coal energy with nuclear power, we would have to build twice as many. But what government would build another twenty-four nuclear reactors?”
The executives rose up.
-Director Park, do you really think the government will give that volume to renewable energy instead?
“Yes, I think it will.”
-On what basis?!
“Because even if we built them evenly across the East Sea, West Sea, and South Sea, twenty-four nuclear reactors would be impossible. And is that all? LNG may be less severe than coal, but it, too, is a main culprit of carbon emissions. Among major countries, LNG isn’t even counted as renewable energy. Then the 30 percent share of LNG generation must also be replaced with renewables, so what mad government would build forty-eight more nuclear reactors on this narrow land?”
At present, Korea’s power generation ratio is 3:3:3 for nuclear, LNG, and coal. But aside from nuclear power, all of them are major sources of carbon emissions. Although LNG emits only half as much carbon as coal, that does not mean it is alternative energy.
In the end, Korea has to fight those carbon monsters that account for 60 percent, and it is not easy.
Whether to build forty-eight more nuclear reactors, or lay down solar panels with no efficiency to speak of... it was a binary choice where either option would inevitably draw criticism.
-No matter what, solar isn’t it! We’ve already tried it!
“Do you see the Jeonnam citizens lying down in protest right now? There’s this much opposition to adding just one reactor, so how are we supposed to build forty-eight?!”
-Fine, let’s assume the government does renewable energy. Even then, do you think the work will come to us? They’ll use Chinese products with superior technology and prices!
“That’s why I’m saying we should try. Let’s develop the technology from now on and catch up in unit cost and technical capability.”
-With what money, exactly?!
“The pension fund says it will give us the cash-cow affiliates!”
“Everyone, stop.”
As the raised voices continued, Nam Sanggi opened his mouth.
“I think I’ve heard enough, so let’s end it here.”
-Chairman! Withdrawing from the solution business is a decision we made after years of deliberation! Renewable energy makes no sense in Korea!
“I know. But building forty-eight more nuclear reactors makes no sense either.”
-Ch-Chairman...
“I will consider it carefully and reach a conclusion. Director Park, stay behind for a moment.”
After dismissing the opposing voices in that way, only Nam Sanggi and Director Park remained in the conference room.
“Director Park.”
“Yes, Chairman.”
“This is truly difficult. My thoughts aren’t that different from the executives’. But with the pension fund pushing like this, I don’t know what to do.”
“We must do it. We have to use the money the pension fund provides as supporting fire to develop technology and innovate costs. Only after we secure that technical capability will the government use our solar and wind power generators.”
“I say this because that process will not be done with a mere pittance.”
Nam Sanggi looked up at the distant sky and sighed.
“To endure those losses, I would have to take all my younger brothers’ affiliates and use them as cash cows. How am I supposed to do that?”
“Didn’t they hint at it from that side? That they would become a friendly stake always on your side, Chairman.”
“...Director Park, do you also think it’s right for me to stab my younger brothers in the back?”
“Strictly speaking, it isn’t stabbing them in the back. It’s simply returning them to their rightful owner. Imagine Hoam Electronics without mobile phones and electronic devices. Could it have endured that long semiconductor slump on retained earnings alone?”
“...”
“To beat Chinese solar panels that receive subsidies from the authorities, we also need profitable affiliates. If we can just survive until the chicken game ends, a market that can make up for all those losses will be waiting for us.”
Director Park drove the nail in for Nam Sanggi, who was gradually being persuaded.
“If you need a knife, use me. If we ask former executives over there to bring us a few financial documents, they’ll bring plenty of dusty ones.”
Nam Sanggi smiled bitterly.
In truth, this was not a problem that would be solved simply by taking profitable affiliates from his younger brothers. That was merely one of the tasks he naturally had to do.
Perhaps from now on, all the money earned from defense would have to be invested in solar power. The world had become one where the probability of China abusing its leverage over parts was greater than North Korea invading the South.
*
“Goodness—before I die, I’ve actually come all the way to Eldest Brother’s house.”
“Welcome. Your sister-in-law prepared a feast because you were coming. Let’s have a meal together for the first time in a while.”
“A feast, too? Hahaha.”
“If I’d known it would be like this, I would’ve at least brought a gift for Sister-in-law. I thought we were going to talk about something heavy, so I came for nothing all tense.”
The three brothers, gathered for their father’s death anniversary, enjoyed a cozy time together for the first time in a while.
When they had fought over the inheritance, their relationship had fallen apart to the point that they even held ancestral rites separately, but the eldest brother, Nam Sanggi, seemed to want to restore that relationship.
“Mingi, how’s business for you these days?”
“The resort just follows the economy. The government is giving various benefits to stimulate domestic consumption, so sales are improving day by day. I guess this sort of thing suits me better than troublesome businesses after all. Hahaha.”
“Yeonggi, you?”
“Department store sales are just like Second Brother’s, tied to the economy. Every time you turn on the news, they say there’s a recession, but I don’t know what they mean. Whenever new Hermès, Louis Vuitton, or Chanel products come out, people line up from the day before. It’s a huge boom. Our Galleria’s sales next year will probably hit an all-time high.”
Business talk continued until after the meal ended and tea followed.
Fortunately, his younger brothers’ expressions were bright. The news said day after day that consumption had frozen and the domestic market was dying, but luxury bag sales were breaking records every day, and resort sales were always good as well. It seemed even the domestic market had a widening gap between rich and poor.
“Second Brother, even so, let’s not brag too much. I hear our self-propelled artillery is selling like crazy in Poland these days. Compared to KD Techwin, our sales don’t even come to half.”
“Oh dear. We were showing off in front of the real expert, weren’t we?”
“Eldest Brother, you should talk about your business too. How’s business these days?”
When his turn came, Nam Sanggi quietly set down his teacup.
“Thanks to you two, I’ve been able to focus only on management, so the results are good.”
“Then why does your face look so dark? Did Sister-in-law prepare such a feast after so long that you ate too quickly?”
“It’s the future that’s the problem. The defense industry can’t keep growing forever like it did during World War II, and once the Russo-Ukrainian War ends, there will surely be restructuring. I’m worried.”
“Goodness... as expected, our eldest brother plays in a different pond.”
“Solution is also a problem. Our solar power market share is collapsing day by day against Chinese parts, so how could I not worry?”
“Brother, that’s why Father said it too. If you think it isn’t right, fold it anytime and focus on defense.”
“Right, right. You’re already someone with plenty of worries, and with so many businesses spread out here and there, your face has become half its size. KD Group should also clean up what needs cleaning up and focus on one thing.”
Nam Sanggi smiled bitterly.
“Which is why I say this. I’d like to ask you two for help.”
“Help?”
“Uh... Mingi, Yeonggi. I’ll simply handle the group’s management, so I want you two to step back from the front lines.”
“Wh-what?”
“I’m not asking for your shares. Just think of me as a professional manager appointed by you.”
Crash—
“What kind of insane bullshit is that! You already received all the core affiliates from Father, and now you’re telling us to hand over even this?!”
“Professional manager, my ass! What, now that your younger brothers are making some money, you’re coveting the profitable affiliates too? And you still call yourself our brother?!”
“Second Brother, let’s go! There’s nothing more to hear!”
The result was as expected.
As soon as the real conversation began, his two younger brothers immediately sprang from their seats and left.
Looking at the plate shattered to pieces, Nam Sanggi thought that the relationship between the three brothers could no longer be turned back.
Then he had to make a decision now. Would he be swayed by lingering affection, or would he purge them without blood or tears like Yi Bang-won?
After finishing his thoughts, he called Director Park.
“Director Park, it’s me. Hand those documents over to the National Tax Service.”