Chapter 413 |
[Breaking News: Seosung Group Chairman Im Jin-yong Arrested!]
[Seosung Group Reeling from Shock!]
[An Unprecedented CEO Arrest. How Will Seosung Group Respond?]
[Growing Concerns Within the Business Community]
[OTK Company Has Not Issued a Separate Statement]
Following the bail hearing, Chairman Im Jin-yong was detained at the Seoul Detention Center.
Taek-gyu asked.
“Isn’t His Excellency there, too?”
“That’s right.”
For reference, a detention center and a prison are fundamentally the same, but a detention center holds unconvicted inmates whose trials are not yet finalized, while a prison holds convicted inmates whose trials are over.
It’s the kind of information most people will never need to know in their entire lives. I wouldn't have known it myself if I hadn't been interrogated by the prosecution several times.
When Chairman Im Jin-yong's arrest was finalized, some celebrated, saying, "Justice has finally been served," while others condemned it as "the current administration's war on chaebol."
The prosecution's office dismissed the controversy, stating, "We did not apply an excessively harsh standard because he is a chaebol chairman, nor did we grant him special treatment for the same reason."
With the Korean economy more dependent on the Seosung Group than ever, Chairman Im Jin-yong’s arrest was a predicament for the current administration as well.
But they couldn't just let him go when the criminal charges against him were so clear.
The conservative camp immediately worried about the negative impact on the economy. And, to a certain extent, their fears became reality.
Although several chaebol chairmen had been arrested in the past, it had never significantly affected stock prices. This time, however, was different.
Given how well Chairman Im Jin-yong had led the Seosung Group and with large-scale investments on the horizon, the market perceived this as a major blow.
After the market opened, Seosung Electronics' stock fell by 3.3 percent, Seosung C&T by 8.5 percent, and other group affiliates dropped by 5 to 10 percent.
On the other hand, with President Im Soo-mi expected to play a more important role within the group, the Ceylon Hotel's stock rose by 13 percent.
It was only natural for him to be arrested for his crimes, but the timing was terrible.
In the Saemangeum development project, Seosung Group is the second-largest investor after OTK Company.
An investment plan doesn't end with a mere announcement. The process of executing it requires making critical decisions that can have a huge impact on the company.
Matters that could have been handled easily by just telling Chairman Im Jin-yong now had to be discussed one-by-one with the presidents of each affiliate.
The lower you go in rank, the weaker the authority. A chairman can say yes or no immediately, but a president has to deliberate before answering.
No matter what prior instructions Chairman Im Jin-yong had left, the momentum was bound to slow down.
In any case, the development had to continue, and my senior colleague, Sang-yeop, was running around frantically to meet with the affiliate presidents.
***
Days passed, but the aftershocks showed no sign of subsiding.
Foreign media also reported extensively on Chairman Im Jin-yong's arrest, and experts analyzed the potential impact on the economy.
Talk of a special pardon was already beginning to circulate.
The President of Korea holds immense power, one of which is the right to grant pardons.
President Heo Chang-min had long argued, since his time in the opposition party, that the presidential pardon should be abolished, and he even made it a campaign promise. However, even within the ruling party, there was a strong sentiment that the president should exercise the power of pardon, considering the economic situation and public opinion.
Thanks to his down-to-earth demeanor over the years, Chairman Im Jin-yong had a better public image than other chaebol leaders.
This was proven by a public opinion poll conducted right after his arrest (why they did it, I have no idea), in which 83 percent of respondents said he should have been investigated without detention.
The problem was, to receive a pardon, his sentence first had to be finalized. But with so many charges against him, it was highly likely that the first trial alone would take at least six months.
Ultimately, he would have to remain in the detention center until then.
Conservative media outlets ran articles arguing that Chairman Im Jin-yong's arrest was a targeted investigation by the prosecution and that an internal conspiracy was at play.
Many people were curious about the identity of the whistleblower.
The audio recordings and documents sent to the prosecution and the media were not accessible to just anyone. You have to be in a high position to access such important information. As such, even if the source was anonymous, the number of people who could possess that information was limited.
Therefore, now that the story was out, identifying the person wouldn't be too difficult.
I spoke with Director Kim Young-jik on the phone. He was the nephew of Director Kim Myung-soo, a long-time retainer of the Seosung family, and an alumnus of the same school as Chairman Im Jin-yong.
“Have you identified the whistleblower?”
[It seems to be Moon Cheol-young, a former Senior Managing Director at Seosung C&T. He’s known to be a close associate of the former president, Im Seung-yong.]
During the succession battle for management rights, a massive purge had taken place, stopping just short of bloodshed. Chairman Im Jin-yong had ruthlessly fired anyone he considered to be in the opposition and placed his own people in their positions.
Former Senior Managing Director Moon Cheol-young had been one of those cut loose.
[Circumstantially, it seems unlikely he acted alone.]
“What could be the reason?”
[I'm not sure. We can't locate him, and he isn't answering any calls.]
Exposing internal corruption isn't something to be condemned. If anything, he should be praised for it.
What I was curious about was the motive. Was it for social justice? Or was it on someone's orders?
He spoke as if letting out a sigh.
[It would have been much better if this had happened under the previous administration. Right now, the prosecution is taking a hardline stance, which makes it difficult to respond.]
"So we should assume they timed this deliberately."
I recalled the image of Im Seung-yong I had seen at the late Chairman Im Il-kwon's funeral.
He had once tried to seize control of Seosung SB with his mother, Yeon So-hyun. But the attempt failed, and he was forced to give up even Seosung Heavy Industries and Seosung Engineering, which were originally his, and leave the group entirely.
He was currently known to be living in New York with his family.
This raised a question.
Regardless of the illegality of the process, Seosung Group's stock price had risen significantly after Im Jin-yong became chairman.
From the shareholders' perspective, it didn't matter whether Chairman Im Jin-yong was a good guy or a bad guy. What mattered was how much he could raise the stock price.
Wouldn't a CEO who was good at management, even if there was some illegality in his succession process, be better than one who was nice and diligent but bad at business?
Even in a situation where the illegal succession had been proven true and he was arrested, the majority of shareholders supported Chairman Im Jin-yong.
Therefore, Chairman Im Jin-yong's control over the company was unlikely to be shaken. So why would Im Seung-yong pull something like this now?
After hearing my thoughts, Taek-gyu said.
"Isn't it just revenge?"
"I don't think he'd do something this big so thoughtlessly."
Im Seung-yong, though not as capable as his brother, would have been thoroughly educated as a manager.
What could he possibly gain from all this?
***
Chairman Im Jin-yong was reportedly given a solitary cell at the Seoul Detention Center.
Considering that other inmates were living crammed together in overcrowded rooms, this was a massive privilege.
He also had daily visitations with his lawyers. This, too, was something only possible because of money.
But…
"No matter how good the treatment is, a prison is still a prison."
It's like how no one wants to go back to the military, no matter how much it's improved.
Taek-gyu nodded.
"Who would've thought our Chairman would end up eating prison food?"
"They serve white rice these days."
Due to the decline in rice consumption, the government's granaries are overflowing with old rice. I guess they have to consume it somehow.
"Looks like we won't be able to play Lost Fantasy Online with him for a while. Who's going to level up his Paladin? Ah! You don't think he left it with an employee, do you? Telling them to hit max level by the time he gets out."
“…”
Would he really have worried about a game character while getting arrested?
"When do you think he'll get out?"
"I don't know. Within a year, maybe?"
The number of chairmen who have gone to detention is countless, but the number who have actually served their full sentences is small enough to count on one hand.
He's already said to have assembled a legal team on par with the Avengers.
"But even with the best lawyers, is there any way out when all the evidence is already out there?"
I recalled what Ellie had told me.
"Even if they fail in the legal battle, there are plenty of ways out if you look for them. Medical bail, a stay of execution, and so on. They can drag out the trial like that and get a reduced sentence on appeal, or they could just drop the appeal after the first trial and wait for a special pardon."
Truly, these are methods unimaginable for those without money. Things like this really show you that money is king.
"Didn't he end up like this trying to make even more of that money?"
No matter how much money he had, he was still just one citizen. In the end, even Chairman Im Jin-yong couldn't transcend the law. Once arrested, all the privileges he could enjoy with money become extremely limited.
I suppose that's why the chairmen try so desperately to avoid being arrested.
A thought suddenly occurred to me.
"If I were to commit a crime, would I be taken away and locked up like that?"
Taek-gyu shook his head.
"Do you even need to commit a crime? Back in Your Excellency's time, they'd lock people up even if they were innocent."
"Well…"
He had a point.
If they wanted to get you, they would. If you got on the wrong side of the administration, they could invent a crime for you.
***
Some people had talked as if the Korean economy would collapse if Chairman Im Jin-yong were arrested, but in reality, not much changed afterward.
The capital market remained calm, and the stock prices that had temporarily fallen returned to their previous levels. The Korean economy and the Seosung Group were not so fragile as to fall apart because one person was gone.
I took this opportunity to review OTK Company's major businesses.
First, self-driving electric vehicles.
CarOS was the number one contributor to OTK Company's growth. Our self-driving EVs, represented by the AD series, were being sold across the United States and Europe.
We were currently in the process of establishing battery-swapping centers across the U.S. ahead of the launch of our unmanned electric truck.
Fortunately, Daryl was handling this area well without me needing to worry about it. The cash flow was good, so we didn't need to inject any money.
Second, pornography.
Just as Americans can't live without porn (as is true for the whole world), FaceIt had the second-highest traffic among OTT services in the U.S., after NetPlay. The number of subscribers and revenue were growing steeply each year, but net profit remained at rock bottom.
The reason was constant reinvestment.
FaceIt poured 40 percent of its profits into producing its own porn and the other 60 percent into the development of VR, adult toys, and real dolls.
To this end, we had spent a fortune to acquire the American adult toy company, Dancing Rabbit. Toby Strong had declared that FaceIt would evolve from a simple OTT service into an O2O (Online To Offline) company that translates visual pleasure into physical pleasure. (It was the first time I realized the term O2O could be used this way.)
Thanks to the efforts of Assemblyman Nam Seong-Gwi, pornography was legalized in Korea, and we were scheduled to build a video studio in Saemangeum to produce and service Korean porn.
Third, batteries.
OTK Battery was being used throughout the electronics industry, beyond just automobiles, and was gradually replacing conventional NCM batteries. Production volume had also increased explosively.
With a steady stream of patent royalties, Professor Kim Ho-min continued his research on new types of batteries.
The OTK Research Institute planned to relocate next to the nation's largest battery complex once it was built in Saemangeum.
Fourth, the Traveling Wave Reactor (TWR).
The experiment in Russia had concluded successfully, and we were now steadily proceeding with the commercialization phase. Eight countries had already expressed their intention to participate, and they had also agreed on technology standardization.
A TWR research complex was scheduled to be built in Saemangeum.
Saemangeum would be a new city with a population of over one million and a high-tech industrial hub. Once the factories were operational, they would require an enormous amount of electricity.
Although we hadn't officially announced it, some of the power would be supplied by wind power, and the rest by TWRs.
This area was also being handled well by Professor Petrov and Rosatom; we had only invested the money.
Fifth, the Saemangeum new city development.
Archit was the overall manager of this project. Having handled the California restoration project and now the Saemangeum urban plan, Archit had made a name for itself worldwide.
Just as everyone uses MS Office for documents, 'Arc,' the architectural design software created by Archit, had become an essential tool for architects.
Sixth, VRMMORPG development.
This was the largest project in gaming history. OTK Games was pouring every penny it earned from Lost Fantasy M and Lost Fantasy Online into it.
If successful (and it would be, of course), it might become a cash cow that surpasses our self-driving electric vehicles.
However, the development process was fraught with difficulties. It would be a long time before it was commercialized and started making money.
***
While various things were proceeding simultaneously, President Ichikawa flew to Korea.
After moving his headquarters to Detroit, he had been busy personally leading the Seruana Project. The fact that he had put his work on hold to come to Korea meant that something important was up.
He got straight to the point.
"To create a virtual world with VR, our current server capacity is not enough to handle it."
Taek-gyu asked.
"How short are we?"
"We need hundreds of times our current capacity."
“…”
Just how much of a shortfall was that?
President Ichikawa stated, as if making a declaration.
"We need to build a dedicated data center."
(TL/n: Taekgyu saying excellency I think he means Park Si-hyeong)