Third-Generation Chaebol

The aftermath of the foreign exchange crisis was still heated with the issue of insolvent companies.

The government issued a final ultimatum: it could no longer provide support and urged negotiations with the creditors.

Large companies, including Hyundai Construction, held onto the hope that 'Surely the government wouldn't just let us die.'

But the Financial Supervisory Service warned sternly, saying, "Even if the government wants to save you, there is no way."

This caused chaos even within the Hyundai Group.

Chairman Jang Young-joo, who should have been resting in his hospital room, got up.

In the hospital room of honorary Chairman Jang Young-joo, heavy breathing filled the air.

In front of him sat Jang Young-jun and Jang Kyung-joon.

Jang Young-jun, in charge of Hyundai Construction, hung his head low, pleading for his father's help.

"We did not foresee Tae-woo Group targeting Hyundai Construction. Our plan was to temporarily get help from creditors to reduce debts."

"Why must Hyundai Construction suffer such humiliation! Help from creditors? That's just another way of saying handing the company over to creditors!"

Chairman Jang Young-joo's condition worsened.

Yet at this moment, he showed the vigor reminiscent of his prime.

It was clear how deeply attached he was to Hyundai Construction and how vehemently he hated the idea of it falling into the hands of creditors or Tae-woo Group.

"There was no other way. Even if we wanted to save Hyundai Construction on our own, there was no method."

"Is that what you say coming from a chairman's mouth? No way? Then find a way! Isn't that your job as chairman?"

"...I did my best. I even went to North Korea to seek government help. But I never expected the government to suddenly take this stance."

"And you think ignorance is an excuse? A leader like you must never utter such words!"

Honorary Chairman Jang Young-joo's breathing grew increasingly labored.

It looked like he might stop breathing any moment.

Jang Kyung-joon hurriedly intervened.

"I will stop Hyundai Construction from falling into other groups' hands."

"Hoo... Yes, brothers must help each other. Even though we are independent, we share the same blood of Hyundai Group, so we should help."

"I'll negotiate with the creditors and acquire Hyundai Construction myself. That's far better than letting it go to Tae-woo Group."

"Is that really necessary? Might we support Young-jun with funds instead...?"

Chairman Jang Kyung-joon looked at his father.

Anger welled up inside him at how, until the end, his father cared more for his younger brother than himself.

But seeing the oxygen respirator beside his father, he suppressed his fury.

"Will things change just because I provide support? They couldn't even cover a mere 20 billion won promissory note and ended up with the first bankruptcy. And supporting them with funds alone will never solve Hyundai Construction's debt problem. To persuade the creditors, the ownership of Hyundai Construction must change."

"Are you saying the first bankruptcy is my fault? I did my best too. What more am I supposed to do here?"

It was a fight between brothers, as if they were about to rise from the hospital bed.

Jang Young-jun angrily raised his voice at his older brother.

But Jang Kyung-joon ignored his brother and kept his gaze fixed on their father.

"Hyundai Construction isn't the only problem. Hyundai Electronics is also on the brink of bankruptcy. Especially the semiconductor business, which was almost snatched from CL Group, is draining huge amounts of money."

"Is what Kyung-joon says true?"

"...Debt is rapidly increasing because of the semiconductor business. The IT bubble heavily damaged the semiconductor market as well."

"Hoo... Problems with both Hyundai Construction and Hyundai Electronics. How did Hyundai Group fall so far?"

Jang Kyung-joon felt a weight on his chest.

He wanted to shout out that this humiliation was because his father had chosen Jang Young-jun—not him—as the successor.

But he held back.

For his father's health and to maintain his composure to secure Hyundai Construction, he had to stay calm.

"The situation with Hyundai Securities is also dire. Fund returns have plunged to -70%, and because some funds were guaranteed principal, huge payouts are required."

"You're saying even Hyundai Securities is at risk?"

"With the situation like this, which bank would trust Hyundai Group enough to lend money? Even if I were a creditor, I wouldn't trust them."

"So that's why you want to take charge of Hyundai Construction?"

"It's a hundred times better than letting it fall into others' hands. Hyundai Motors' exports are rapidly increasing. Hyundai Construction has enough capability and time to weather this crisis."

"My last request. Can't you just support your younger brother with the funds?"

Jang Kyung-joon looked at his father's face.

He was the greatest contributor to Korea's economy and the person he respected most.

But the man lying in the bed was not the person he once knew.

"I want to, but I can't. I don't want to go back to prison for breach of trust. I never want to go back to prison. My left knee is bad enough; my right knee can't go that way too."

"I'm sorry... truly sorry. I should have gone to prison back then. It wasn't your place to go in my stead..."

It was already in the past.

The fact that he went to prison, and that he handed over the group's leadership to his younger brother.

All of that was behind him, so he could let it go, but Hyundai Construction was not past—it was the present and the future.

"I'll bury the past and move on. More pressing is that acquiring Hyundai Construction won't be easy. If the Tae-woo Group pushes in with its massive financial power, there's nothing we can do."

"The government will never allow it. If Tae-woo eats up Hyundai Construction too, it would be a monopoly."

"Do you still not understand the government's stance? They're taking the position of not intervening in the market and letting businesses handle things themselves. Do you think they'll have a problem with a monopoly?"

Jang Kyung-joon looked down on Jang Young-jun.

His brother's ignorance of the real world still seemed pitiful.

"So what do you propose?"

"We have to make a choice. Either give Hyundai Construction to Tae-woo Group or throw them another affiliate."

"Can we block Tae-woo's acquisition of Hyundai Construction by giving them another affiliate?"

"Chairman Kim Tae-jung has long shown great interest in semiconductors. If we hand over the semiconductor business, wouldn't that work?"

Honorary Chairman Jang Young-joo pounded his chest.

Hearing talk about handing over parts of Hyundai Group to others left him gasping for air.

"Hoo, yeah, semiconductors would be better than construction. We can't hand over Hyundai Construction, the core of Hyundai Group, to someone else."

"There's another reason to hand over the semiconductor business. As Young-jun said, the semiconductor market is in a slump due to the IT bubble. Naturally, Tae-woo Group will also have to pour vast funds into it."

Jang Kyung-joon had allied with Tae-woo Group.

But that didn't mean they were eternal allies.

He was planning to pass the bomb onto Tae-woo Group this time.

"Young-jun, what do you think? Is it okay to hand over semiconductors to Tae-woo Group?"

"It seems like a reasonable plan. This year alone, the semiconductor division's deficit is over 300 billion won. And just the division's debt exceeds 6 trillion won."

"Six trillion won… Even for Tae-woo Group, that's not an easy sum."

"Moreover, the semiconductor market will be in continuous recession for the foreseeable future. It looks like an appealing business on the surface, but it's full of poison."

Jang Young-jun was skeptical about the semiconductor division.

In fact, Hyundai Electronics was in a tougher spot than Hyundai Construction, mainly because they had taken over the semiconductor division from CL Group.

If they could just pass that onto Tae-woo Group—

Tae-woo Electronics would end up suffering the same pain Hyundai Electronics had endured.

"Then let's decide to hand over the semiconductor business to Tae-woo. If that happens, Kyung-joon, do you think you can acquire Hyundai Construction?"

"I'll have to negotiate with the creditors to be sure, but if Tae-woo Group steps out of the bidding, our chances will skyrocket."

"Young-jun, don't be too disappointed. Focus on using the funds from selling Hyundai Construction and the semiconductor division to revive other affiliates. Especially if you can get a firm grip on Hyundai Securities, the funding issues will be solved quickly."

"I will do that."

On one hand, Jang Young-jun felt relieved.

How much stress had the debt-ridden Hyundai Construction and semiconductor division caused him?

He no longer had to beg banks for money or kowtow to the lenders in Myeong-dong, and this brought him a sense of ease.

***

The next day.

I met Dimon, waiting in Captain Kang's office with good news.

"Hyundai Group contacted us saying they're going to hand over the semiconductor business to Tae-woo."

"They're giving up the semiconductor division sooner than expected. They must really be short on funds."

"Of course they are. Heavy industry, securities, and construction are all faltering."

"Looking back, selling Tae-woo Shipbuilding must have been a masterstroke."

It wasn't wrong to say Hyundai Group's current instability was because of me.

By selling Tae-woo Shipbuilding to current heavy industries, they weakened their financial capacity.

As for the securities side, they launched principal-guaranteed funds first, forcing Hyundai Securities to follow suit.

And in construction, backed by enormous funding from SAVE Investment, they won all government-led projects, leaving no work for Hyundai Construction.

"Chairman Jang Kyung-joon kept his promise, so we should keep ours. Let's hand over Hyundai Construction to him."

"Hyundai Construction is essentially already in the hands of the creditors. And isn't SAVE Investment the most influential among the creditors?"

SAVE Investment had loaned substantial funds to Hyundai Group.

All the funds used to acquire Tae-woo Shipbuilding were borrowed from SAVE Investment.

All the loans were in dollars, and due to the foreign exchange crisis, the debt ballooned to twice its original amount.

This debt spread evenly across various affiliates, and SAVE Investment was part of Hyundai Construction's creditors.

"Don't sell Hyundai Construction to Chairman Jang Kyung-joon for too cheap. Negotiate reasonably to get a fair price."

"Of course. For a while, we'll squeeze Hyundai Motors until it barely has funds to develop new cars."

"If you ask for too much, Chairman Jang Kyung-joon might give up on Hyundai Construction, which would be problematic."

"We'll only push to the limit. That way Tae-woo can acquire the semiconductor division. But acquiring the semiconductor division is risky—the deficit is huge."

At this point, acquiring the semiconductor division was almost suicidal.

Even economic experts called it "madness."

Could I not know that? I had my reasons for wanting to acquire the semiconductor division.