It was a few days before the end of 2009.
Fukuda, the director of the Economic Research Institute, came to see me.
When I became chairman, I had promoted him from adviser to director of the institute, and he had been submitting reports monthly or quarterly ever since.
However, he had always reported in writing. He had never requested a face-to-face meeting like this before, which made me suspect that the contents of this report were unusual.
"Director Fukuda, it's been a long time. I should have visited more often and spoken with you, but I've been negligent."
"Chairman, your time is too valuable to be wasted on someone like me. So, let's get straight to the point. Please review the report first."
The report consisted of only three pages.
Two pages covered the stock price war between Tesla and the short-selling forces.
The remaining page explained that the Taewoo Group was also structurally vulnerable to short-selling attacks.
"Do you believe the Taewoo Group could be targeted by short sellers, like Tesla?"
"Yes. Previously, the debt ratio was zero, and with massive retained earnings, there was no cause for concern. But the situation is different now."
With the acquisitions of AIG and GM, the debts they carried had also transferred to the Taewoo Group.
Although the U.S. government had provided significant debt relief, both companies were still operating at a loss, making them, in Director Fukuda's view, like a ticking time bomb.
"The deficits of the acquired companies are steadily shrinking. With the profits from other affiliates, a little patience will allow them to return to profitability soon."
"I see it the same way. I expect that, at the earliest, within three years, and at the latest, within five, we can turn a profit. However, if a major economic crisis occurs during that period, we could become a target for short sellers."
Clearly, the next three years would be the period when the Taewoo Group's finances were at their most fragile.
AIG, GM, electric vehicles, and even underground resource development—
they had invested in an incredibly wide range of ventures, and the Taewoo Group's treasury was nearly drained.
Of course, the group still had several cash-cow subsidiaries, so there was no immediate danger. But, as Director Fukuda had warned, if a major economic crisis were to hit, a liquidity crunch could occur.
"Hmm… there's definitely some truth in what you're saying. We should convene an emergency executive meeting."
"Are you suggesting we call an executive meeting solely based on my words? It wouldn't hurt to analyze a little more first."
"No. You were the first to recognize the IMF crisis, Director Fukuda. Matters like this must be addressed as quickly as possible to prevent any worst-case scenario."
I immediately convened the Taewoo Group's emergency management meeting.
In reality, the attendees were only Vice Chairman Park Mandeuk, President Han Jeonghun, and the head of planning, while Director Fukuda took the role of presenter.
"Thank you all for attending despite your busy schedules. The purpose of this meeting is to discuss measures to ensure the financial soundness of the Taewoo Group."
"I requested that the chairman call this emergency meeting. According to the analysis by the Economic Research Institute, the Taewoo Group is currently like a leaking jar. Due to excessive quantitative expansion, no matter how much money comes in, it all leaks out through the holes."
Director Fukuda's report was not incorrect.
However, his report omitted the Taewoo Group's hidden assets.
By leveraging hidden assets, including the fintech bank, the group could have easily weathered any economic storm.
Still, it wasn't a bad idea to prepare in advance.
It was better to avoid a situation where we would need to use these hidden assets unnecessarily.
Not everyone, however, agreed with him.
President Han, in particular, who was strong with numbers, voiced his opposition.
"We've indeed spent a lot on acquisitions like AIG and GM, and there will be more expenses in the future. But I cannot agree that we are facing a crisis. The revenue from Taewoo Semiconductor, Electronics, and IT alone is sufficient to handle our obligations."
"That may be true for now, but the moment another global economic crisis hits, we will face a liquidity crunch."
On the surface, the Taewoo Group looked rosy.
They had acquired globally significant companies like AIG and GM and had successfully broken into the electric vehicle market.
That didn't mean the group was rotten at its core.
Director Fukuda was merely pointing out that, in the worst-case scenario, the Taewoo Group could be at risk.
"Even if another economic crisis hits, the Taewoo Group has enough strength to withstand it."
"It's only capable of withstanding it. There's insufficient driving force for growth. AIG, GM, electric vehicles, and even underground resource development—all these require over 100 trillion won annually in periodic expenditures."
"After a few years, the acquired companies will stabilize, and then expenditures will decrease significantly."
"I'm mentioning this because another global economic crisis could occur within those few years."
A fierce debate ensued between President Han and Director Fukuda.
Fukuda, raising his voice slightly to emphasize the gravity of the situation, continued.
"Just as short sellers attacked before, the Taewoo Group could become a target. Right now, our financial soundness protects us. But if the group falters due to an economic crisis, we could become easy prey."
"Why would short sellers attack the Taewoo Group? We have more than a few cash cows. Even if attacked, we have the strength to defend ourselves."
"Because we've expanded so massively, we are inherently vulnerable to short-seller attacks."
He wasn't wrong.
Defending against short sellers would require enormous capital.
And that capital could come at the expense of funds needed for the group's growth.
For that reason, I sided with Director Fukuda.
"Indeed, the Taewoo Group has expanded excessively. If a liquidity crunch hits, the group's growth momentum could vanish."
"Even if liquidity tightens, it's not a big problem. We can just borrow temporarily from Wall Street's capital, can't we?"
"Have you forgotten the IMF era? Even the Taewoo Group nearly collapsed under excessive debt. It's better to avoid borrowing whenever possible. There's a much better approach."
Everyone turned their attention to me.
The best way to prepare for a potential economic crisis was simple.
"Let's replenish our depleted treasury. As Director Fukuda said, another economic crisis seems imminent. But if we can prepare for it in advance, wouldn't that be the best investment?"
"It's difficult to predict where the crisis will start. Europe, the U.S., or East Asia… it wouldn't be surprising if it started anywhere."
I already knew where the next economic crisis would begin.
The impending European financial crisis.
The world was still trembling from the aftermath of the Lehman collapse, and the first major impact would be felt in Japan.
In Japan's case, it wouldn't be the Lehman collapse that shook the economy, but the effects of a massive earthquake.
The resulting shock would trigger the European financial crisis, plunging the global economy once again into a dark era.
However, there was a problem.
While other economic issues could be predicted, a natural disaster like the Tohoku earthquake in Japan was impossible to foresee, making it difficult to bring up.
"Based on a synthesis of Wall Street intelligence and my personal channels, it appears highly likely that economic crises will hit Japan and Europe."
"The Economic Research Institute also predicts worsening conditions in Europe, particularly Southern Europe. The euro's instability and the aftershocks from the Lehman collapse are aggravating economic circumstances. But Japan doesn't seem to face such negative factors."
Director Fukuda wasn't saying this because he was Japanese.
To anyone's eyes, Japan had no immediate factors that could be called a major crisis.
"Then let's move on to a two-track approach. Assume that half the crisis will hit Japan and the other half Southern Europe, and proceed with investments accordingly."
"To create an investment portfolio, we need to predict how Japan's economy will develop."
"Use the economic conditions during the Kobe earthquake as a reference to plan our strategy."
Everyone looked at me in surprise.
The sudden mention of the "Kobe earthquake" had caught them off guard.
I knew the term didn't quite fit the current situation, but I didn't have the confidence to explain, so I let it slide as if I didn't notice.
"Of course, I'm not saying another earthquake will strike Japan. I'm asking you to predict a similar economic crisis as it occurred back then."
"We could recreate KIKO products in Japan, or use paper companies and fintech banks to short-sell Japanese firms."
"Focus especially on companies in the manufacturing sector when creating your plans."
No one questioned my instructions.
There were bound to be parts they didn't understand, but thanks to the results I had achieved so far, the executives didn't dare challenge me.
"And for the Southern European countries, let's also plan for the worst-case scenario. For example, if Greece goes bankrupt, predict how Europe's economy will react and create an investment portfolio accordingly."
"If Greece goes bankrupt, are you referring to the IMF?"
"Greece currently has the weakest fiscal condition in Europe. Much like Korea once did, the possibility of a national bankruptcy is fairly high."
Everyone nodded in agreement with this directive.
In Japan's case, the reason—an earthquake—sounded absurd.
But for Greece, there was concrete evidence of fiscal deterioration, so it was entirely believable.
"If Greece is the starting point and the rest of Southern Europe falls into fiscal distress, the euro is expected to be the first to take a major hit."
"Currency? Isn't that Quantum Fund's expertise? It wouldn't hurt to sketch out the big picture with Director George."
I was essentially saying that we'd use the Quantum Fund as the public face.
Making money during an economic crisis inevitably draws criticism.
The Quantum Fund, accustomed to playing the villain, was perfectly suited to operate discreetly on our behalf.
"Quantum Fund already made a decent profit from the recent short-selling operation. They've contacted us several times, proposing that we work together next."
"If possible, it would also be beneficial to coordinate with the Saudi sovereign wealth fund."
"I'll meet with both Quantum Fund and the Saudi sovereign wealth fund to discuss and coordinate."
Vice Chairman Park Mandeuk, quietly listening to the conversation with President Han, cautiously voiced a concern.
"I'm not questioning your investment plan, Chairman. But if the projects in Japan and Europe both go awry simultaneously, the Taewoo Group's finances could face severe strain."
"All responsibility rests with me. But if this project succeeds, the Taewoo Group will never again need to worry about fiscal deterioration."
The hidden assets were a secret weapon.
We initiated this project to establish a defensive barrier capable of protecting the Taewoo Group without ever needing to deploy the secret weapon.