"Did you just say we're heading into a currency crisis?"
Facing Chairman Park Tae-hong, who couldn't hide his shock, Seok-won replied in a slightly subdued voice.
"Yes."
His older brother, seated across from him, also spoke with a surprised expression.
"A currency crisis? Isn't that a bit of an exaggeration?"
"I reached that conclusion after carefully reviewing everything that's happened since last year's reverse Plaza Accord between the U.S. and Japan."
Seeing Seok-won's completely serious face with not a hint of a smile, President Park Jin-hyung tried to refute him but eventually closed his mouth.
Chairman Park Tae-hong was at a loss for words as well.
If someone else had said this, he would've scolded them for being overly paranoid. But it was Seok-won—someone who had surprised them time and again with his sharp investment insight and foresight—so they couldn't simply dismiss him.
Even more so, since Seok-won had accurately predicted the possibility of a hostile M&A targeting Midopa Department Store and personally resolved the management dispute with the Donghae Group, his words carried heavy weight.
As the atmosphere grew tense, Chairman Park Tae-hong straightened his posture and said,
"You're right that our current account deficit keeps piling up and there's a huge influx of foreign capital. But we're still earning a lot of dollars through exports each year. Honestly, it's hard to believe a currency crisis could happen."
His older brother nodded, seemingly of the same opinion.
Most people—including the government and financial authorities—probably thought like Chairman Park.
After all, last year alone, the country recorded over $125.2 billion in exports, earning massive foreign currency. It was no wonder they felt secure.
"You're right—in a normal situation, the large inflow of dollars each year would make a crisis unlikely, even with a deficit," Seok-won continued, glancing between his father and brother.
"But if an unexpected shock hits, the story could change entirely."
Chairman Park Tae-hong furrowed his brows.
"By unexpected, do you mean what you mentioned earlier—Japanese banks adjusting to the BIS capital ratio?"
"The unwinding of large-scale yen carry trades is a concern, but it's already happening, so it's not exactly a sudden shock."
"Then is there something else?"
"If a problem arises, the real bombs will be our abnormally high short-term external debt and the massive foreign capital invested in the stock market."
When Chairman Park looked confused, Seok-won explained more clearly:
"You probably know that investment firms are increasingly borrowing cheap short-term foreign loans to fund long-term domestic loans—a classic mismatch of short- and long-term capital to boost profit."
Chairman Park nodded. He remembered President Ko Young-il of Daeheung Securities once tried to do something similar.
"It's not just investment firms. Most large conglomerates are borrowing huge amounts in foreign currency through the Hong Kong capital market."
At that point, President Park Jin-hyung interjected:
"If you raise money domestically, you face sky-high interest rates of over 14%. But foreign loans only cost around 7–8%, so it's natural to prefer them."
"Exactly. The larger the loan, the bigger the interest difference. I'd want foreign loans too."
Seok-won nodded in agreement.
High domestic interest rates stemmed from internal issues.
"As the economy grew, companies needed more investment capital, but savings didn't keep up. Naturally, money became more expensive."
On top of that, with high inflation accompanying rapid economic growth, the Bank of Korea intentionally kept rates high.
"But the problem is most of that foreign debt is short-term, and the total amount is dangerously large."
Because short-term debt had lower interest rates, investment firms heavily relied on debt with maturities under a year.
Corporations did the same—though less aggressively—favoring maturities of 1 to 3 years.
"Of course, firms do this not just for the lower rates, but because foreign loans have been so easily accessible. Borrowing cheaply whenever they wanted meant there was little reason to take on expensive long-term debt."
Seok-won looked toward Chairman Park Tae-hong.
"This was only possible because liquidity had been overly abundant. But that's changing now."
Chairman Park spoke with a grim tone.
"So if yen capital flows out, borrowing foreign debt won't be as easy as before."
Seok-won nodded.
"And the U.S. is now shifting toward a strong-dollar policy, pouring fuel on the fire. Even if foreign rates are lower, once the exchange rate rises, the interest gap disappears. In the worst case, we might end up paying more in interest."
Sensing the severity of the situation, both men silently listened, now with serious expressions.
"Despite our managed floating exchange rate system, the dollar rate has risen from the 700-won range last year to 826 won. That alone is an early warning sign."
"..."
"We're in a dangerously fragile state, and yet the government only holds $36.5 billion in reserves. That's woefully inadequate for a crisis."
"That little?" President Park Jin-hyung asked, surprised.
"The Ministry of Finance recently said total foreign debt is $85.83 billion and could surpass $100 billion by year's end. A lot of that is short-term debt. If the economy slows and the exchange rate jumps, that short-term debt—repayable in dollars—becomes a nightmare."
"Dear God."
Imagining Seok-won's scenario, President Park Jin-hyung involuntarily gulped.
If it happened to him, and his interest burden suddenly ballooned, it would be terrifying.
"And if that happens, foreign investors in our stock market will likely rush to pull their money out to avoid FX losses. Once that foreign hot money starts flowing out all at once, the government's $36.5 billion reserve will melt like ice under the summer sun."
When Seok-won finished his long explanation, the study was enveloped in a heavy silence.
It was no surprise—it was a shocking story.
He sat quietly, giving his father and brother time to digest it.
After a while, Chairman Park let out a deep sigh and spoke first.
"I figured it was something serious when you said you had something to tell us, but I didn't expect you to drop a bomb like this."
"You're telling me."
President Park Jin-hyung agreed with a tense face, rubbing his tired eyes with a faintly resentful look.
Just when they had barely recovered from the Donghae Group incident, here was another headache.
"What do you think are the odds of a real currency crisis?"
Chairman Park asked, and Seok-won answered without hesitation.
"If the government follows through with its OECD membership, opening up financial markets and increasing hot money inflows, while short-term debt continues to skyrocket like now, the crisis will surely come."
Without pausing, he added:
"That's why I've already converted all the surplus funds at the venture capital company into dollars."
"Already?"
"Yes."
His swift action was almost impressive.
Seeing that Seok-won wasn't just predicting but fully convinced of the crisis, Chairman Park groaned.
"Should we also convert our reserves to dollars, like you did?"
"Not just that. We need to tighten spending, halt plant expansions, and aggressively reduce debt to eliminate interest burdens. That might be hard, so we should restructure debt into long-term loans and eliminate all foreign-currency loans."
Seok-won advised firmly.
President Park Jin-hyung leaned forward, looking troubled.
"We've taken on a lot of foreign debt. Converting all of it to won loans won't be easy, and the interest burden would jump."
"Even if it's hard, we have to prepare. Otherwise, we'll be swept away when the crisis hits."
"But this is still just a possibility—you can't be 100% sure, can you?"
President Park Jin-hyung tried to object, but Seok-won's resolve was unshaken.
"If you're waiting until the crisis is obvious, it'll already be too late."
From Seok-won's future-knowing perspective, it was frustrating beyond words.
Still, he understood why his warnings weren't easy to accept.
As the tension thickened, Chairman Park finally spoke in a heavy voice.
"Same thing happened with Midopa Department Store."
Both sons looked at him.
"You warned us early on that the group's governance structure was a problem. We ignored you and delayed changes—then Donghae Group went after Midopa with a hostile M&A, and we almost lost the whole group."
"That's true…" President Park Jin-hyung muttered, unable to argue.
Back then, too, he had thought, "Surely not," and delayed fixing the governance structure due to cost and effort—only to pay the price.
"One mistake is enough."
Chairman Park looked at his eldest son.
"Don't you agree?"
President Park Jin-hyung, after a moment of deliberation, nodded.
"Yes, you're right."
Then Chairman Park turned to Seok-won.
"But we can't act solely on your word. Jin-hyung, work with Director Gil and assess whether this crisis really is likely. We'll decide after that."
It was a critical decision, so he chose to proceed cautiously—and by involving the eldest son, avoided sowing resentment or rivalry.
"This is probably the best I can hope for right now," Seok-won thought.
He wished they would act immediately, but at least they now recognized the danger.
Noticing his coffee had gone cold, Chairman Park set the cup down and sighed.
"A currency crisis, huh? Every time you say you have something to discuss, it feels like you're about to drop another bomb."
He grumbled, and President Park Jin-hyung looked at Seok-won with a complex expression.
"I feel the same way."
Seok-won shrugged, feigning innocence.
"Better than getting blindsided out of nowhere, right?"
Chairman Park clicked his tongue.
"Tsk. You'd be less annoying if you didn't talk."
"I agree," President Park Jin-hyung said, nodding enthusiastically.
Donghae Group Headquarters, Yeongdeungpo
As the sound of knocking was followed by the door opening and Chief Secretary Jeon Hae-cheol entering, Chairman Woo Yong-gap, who had been sitting at his desk, straightened his posture.
"I was just about to call for you. Good timing. Have a seat."
He pointed with his chin to the sofa in the center of the office, and Chief Secretary Jeon bowed in response.
"Yes, sir."
Chairman Woo closed the report he had been reading and stood up, walking around his desk to sit in the central seat of the room. He crossed one leg over the other, and his face looked noticeably more worn and sharp than before.
It was understandable — the ambitious hostile takeover of the Midopa Department Store had ended in failure, dealing a huge financial blow to the group and leading to various legal risks, including an investigation by the Financial Supervisory Service.
When Chairman Woo opened the wooden case on the table and took out a neatly arranged cigarette, Jeon Hae-cheol quickly stood up, took out a lighter, and lit it for him.
Leaning back, Chairman Woo inhaled deeply from the white cigarette and exhaled slowly before speaking.
"How's the funding for acquiring the securities firm shares from those Hong Kong bastards coming along?"
Jeon responded calmly.
"We should be able to raise $60 million under a two-year term through HSBC."
"How much is that in Korean won?"
"At the current exchange rate, approximately 49.5 billion won."
Chairman Woo frowned slightly.
"That's it?"
"The exchange rate has gone up a lot recently — it's 826 won per dollar now, so the exchange loss is significant."
"Click. When things go wrong, everything just falls apart."
He clicked his tongue in irritation. Jeon, knowing both the unfavorable exchange rate and the Chairman's sour mood since the failed M&A, wisely kept silent.
Chairman Woo tapped his cigarette ash into the crystal ashtray and asked,
"Can we raise another $40 million in foreign debt?"
"We'll have to discuss it with HSBC, but it should be possible. The problem is the interest rate — it's not low."
"It was 9%, right?"
"Yes, sir."
9% was significantly higher than the average interest rate Korean companies typically faced when raising funds overseas. But it reflected the risk premium now attached to Donghae Group's worsened financial condition post-M&A failure.
Chairman Woo grimaced.
"Still, it's lower than the domestic double-digit rates, isn't it?"
"That's true."
After pondering for a moment, Chairman Woo looked up again.
"We're short on available cash after the M&A fallout. I'd like to secure some liquidity while we have the chance. What do you think?"
It was true — they had bought overpriced Midopa shares due to Seok-won's scheme and had to sell them at a loss, while buying back Donghae Holdings stock from their rival at double the market value. The group's financials were in shambles.
On top of that, thanks to Woo Ho-geun's criminal acts like stock manipulation and illegal loans, the group was under investigation from both the Financial Supervisory Service and the prosecution. Domestic financing was nearly impossible.
Jeon agreed.
"The interest is burdensome, but like you said, it's cheaper than borrowing domestically. It's not a bad idea."
"Then negotiate with HSBC to increase the loan to $100 million."
"Understood."
That would allow them to sever ties with Peregrine Securities of Hong Kong completely and secure $40 million in additional liquidity — enough to put out the immediate fires. And once the ongoing sale of Donghae Medical was completed, they could finally breathe.
Feeling somewhat more at ease, Chairman Woo extinguished his cigarette in the ashtray and asked,
"By the way, isn't the first trial verdict for that Boseong Telecom stock manipulation case due next week?"
"Yes, sir."
"That bastard."
Just thinking about it made him boil inside, but Woo Yong-gap sighed, pressing his temple with one hand. After all, it was his only son.
"What's the likely outcome?"
Jeon hesitated before answering carefully.
"There's so much evidence that Mr. Woo led the manipulation… it'll be hard to avoid prison."
Chairman Woo glared at him.
"Even after hiring four former prosecutors and judges as lawyers?"
Jeon looked troubled.
"They were hoping to at least get a suspended sentence, but the prosecution submitted loan notes written to friends who received bribes during the trial as evidence, and that ruined everything."
It turned out Woo Ho-geun's friends, Yoo Seok-chan and Jeon Geon-woo, betrayed him and agreed to cooperate with the prosecution in exchange for leniency.
"Hanging out with people like that… pathetic."
Chairman Woo clicked his tongue, clearly disgusted.
Jeon couldn't help but think, birds of a feather. After all, Woo Ho-geun had tried to pin all the blame for the illegal loans on President Kwon of the mutual savings bank — they were all cut from the same cloth.
Still, he kept those thoughts to himself.
"If he gets convicted, how long will the sentence be?"
"Prosecution is asking for 4 years in prison and a 2 billion won fine. That's likely to be upheld."
"Four years in prison?"
Chairman Woo raised his voice in disbelief. His already tense expression grew even more severe.
Jeon added,
"Considering other pending trials — like the illegal loan and bribery cases — he could be in prison for quite a while."
"Ughhh…"
Chairman Woo groaned, holding his forehead in despair.
"He's not a son — he's a damn enemy."
Jeon shared the sentiment. Woo Ho-geun had wrecked the group's finances and reputation.
Even after causing all this damage and proving his incompetence, Chairman Woo will probably still pass the group on to him, Jeon thought bitterly. He may be angry, but he's still defending him.
Jeon didn't hope for Woo Ho-geun to turn the company around — he just hoped he wouldn't ruin it further.
Later…
"I brought the early edition of tomorrow's morning paper."
Na Seong-mi entered after knocking and neatly placed the newspapers on the desk.
"Thank you."
"Would you like some coffee?"
"That would be nice."
"I'll bring it right away."
She smiled and stepped out. Seok-won, having pushed aside the documents he was reviewing, picked up the top newspaper. The ink still smelled fresh from the press.
As usual, he read carefully from the front page, making his way through the political and social sections before reaching the business section.
Just then, Na Seong-mi returned with an iced Americano.
"Thanks."
After she left, Seok-won took a deep sip of the bold, espresso-shot-enhanced coffee.
"The reason I can't quit coffee."
He flipped to the society section and spotted an article with a photo that caught his attention.
[Former Donghae Group Executive Woo Ho-geun Appeals Conviction in Stock Manipulation Case]
Woo Ho-geun, former executive at Donghae Group, sentenced to 4 years in prison and a 1.75 billion won fine for manipulating Boseong Telecom shares, has announced he will appeal.
He admits to the attempt but argues he suffered losses as the stock crashed before he could sell — claiming the sentence is too harsh.
Prosecutors say intent alone justifies the conviction...
A black-and-white photo showed Woo Ho-geun leaving the courthouse with a grim expression.
Seok-won smirked.
"Even if he appeals, avoiding prison is unlikely. But with more trials ahead, he's desperate to reduce his sentence."
Given the strong evidence and the malicious nature of the crimes, avoiding heavy punishment was unrealistic.
Seok-won put the paper down.
"Still, I doubt he'll serve the full sentence."
Even if Woo Ho-geun was sentenced to nearly ten years, he'd likely be released early through a Christmas or Liberation Day presidential pardon once public interest faded.
"The law always bends before money and power."
It was an uncomfortable truth — the wealthy and powerful embezzled billions and committed crimes but returned to lavish lives after short stints in prison, unlike regular citizens.
"Not that this will make him reflect, but at least I won't have to see that infuriating face for a while."
Just then, Seok-won's phone rang. Seeing the caller ID, he answered.
"Hey, bro. What's up?"
[Busy?]
"No, I'm free."
[Just calling about what you said the other day at the family house.]
"Oh?"
He remembered warning his father and brother about a possible foreign exchange crisis.
[We've decided to postpone the expansion of the Shenyang Plant 2 and switch to austerity management.]
"Really? Smart move."
Seok-won's face lit up.
[After your warning, I looked into things — and yeah, the signs aren't good.]
"Even if things don't get that bad, the economy's definitely headed downhill. Better safe than sorry."
[Exactly. Just wanted to let you know. Let's grab a meal sometime soon.]
"Anytime. Just call."
Ending the call, Seok-won looked relieved.
"Now that Daheung Group's preparing, I don't have to worry about them when the IMF crisis hits."