Story of a Big Player from Gangnam

"So, how many product orders are you thinking of offering to us, and how many shares do you want me to release?"

"As a start, we will place product orders worth more than 100 billion won within a year. The volume of our product orders will increase every year."

"Whoa! Did you say 100 billion won worth of product orders?"

"You will have to make sure that you are providing us quality products though. The deal can be well broken if we get defective products."

"What about stocks? I'm sure that you are not asking me to give 100% of the company's shares."

"Hahaha. I know that I can't ask you for that. If I ask you to give us even 50% of the company's shares, you would walk away. I know you want to stay in control of your company by keeping more than 50% of the shares. I want 15% of the ownership."

"What? 15% of the company's shares?"

"An auto parts manufacturing company is in the smokestack industry, meaning that it won't be able to make a dramatic growth in its sales revenue. You will succeed in going public since you are trying hard to fulfill the requirements. Once you do, you will be able to use some funds from the stock market to expand your company, so you could have a few branch offices overseas. Even if you do all those, your company will make a little over 100 million won annually."

"Hmm."

"What do you think? Would you like to have a company that you own 100% with 100 million won of sales revenue? Or, would you like to own 85% of your company which generates 1 trillion won of sales revenue?"

"Hmm…"

It was a huge proposal to Gun-Ho. Gun-Ho couldn't give his response right away, but he let out a groan.

A Electronics CEO Park finished his canned coffee. He verified if there was anything more left in his can by shaking it. There was none left.

"You don't just transfer 15% of the company's shares, but we will increase capital stock. That way, you can justify your decision to give some portion of the ownership to someone. You can tell others that you choose to increase capital in order to lower the debt ratio, so you can successfully register the company with KOSDAQ. People will think that makes sense."

"If I just want to give the shares, I can transfer a part of the shares that I have, but in order to increase the capital, I need to bring funds into the company."

"Of course, you will bring in the funds of 15%."

"How do we do that?"

"According to our investigation, GH Mobile's current capital is 5 billion won. Its total number of issued stock is 500,000, and each share is worth 10,000 won. If we increase it by 15%, the number of shares will become 575,000, and the capital will be 5.75 billion won. The money that you bring into the company by increasing the capital will be used to pay for its debts, and it will lower its debt ratio. You can quickly fulfill one of the requirements to make your company go public. What do you think? Isn't it tempting?"

Gun-Ho sipped his canned coffee and finished it.

"What if I did my part by increasing the capital, but you wouldn't do your part by refusing to place any product orders from us?"

A Electronics' CEO smiled and said, "I will make an indemnity report about the product orders, and I will have it notarized. It's a contract with A Electronics which is one of the largest companies in Korea. You can't say that you can't rely on the contract that is made with us. We will provide you with the product drawing and its mold."

"You will provide us with your product mold?"

"Yes. We have several products that were already developed, and we had to withdraw from the contracts with some of our vendor companies who had supplied those products because of their high rate of defective products. We already recovered the product molds from those companies. I will give them to you for now. GH Mobile will be able to start manufacturing those products with the existing molds right away like even tomorrow."

"If we have molds, yes, that's possible."

"I can send you 750 million won to be used to increase the capital tomorrow if you want. I will send it to GH Mobile's bank account. Again, this deal is not known to Mr. Minister Jin-Woo Lee or his wife. His father is the one who is making this investment."

Gun-Ho turned his head to look at A Electronics' CEO who was wearing gold metal frame glasses. His face looked pale, but he was a well-aged man in his 50s. Gun-Ho was impressed by this man's plan.

'This guy is really smart. Of course, he is smart. He is running A Electronics. His annual salary must be several billions of won.'

Noticing that Gun-Ho was gazing at him without giving him a firm answer, A Electronics' CEO asked, "Is something wrong?"

"I need time to think about this. I understood well your proposal."

"Again, what we talked about today must be kept between you and me. No one can know about this. I will be waiting for your positive decision. Since I didn't bring my car today, would you give me a ride to Euljiro?"

The two men got up from the bench and started walking toward the parking lot of Namsan Public Library where Gun-Ho's Bentley was parked.

After dropping off A Electronics' CEO Park, Gun-Ho came back to his office in GH Building in Sinsa Town. When Gun-Ho entered the office, his secretary—Ms. Yeon-Soo Oh—stared at Gun-Ho because he looked dead serious.

"Umm, sir, would you like to have a cup of coffee?"

"Please bring me a cup of green tea instead."

"Yes, sir."

While having his green tea, Gun-Ho looked outside the window. He thought of what A Electronics' CEO Park had proposed to him.

'He wants 15% of GH Mobile's stock. Once GH Mobile goes public, it wouldn't be just dividends that they receive, but they would make money by owning the company's shares because their price would already increase dramatically. They are extremely smart. Very clever and even manipulative.

His proposal is too tempting to turn down. It is true that they will make big money, but I will make huge money too. Even though they would possess 15% of the ownership, they wouldn't be able to challenge my control over this company. It is indeed a good deal for me. It could be a huge opportunity for me too.

I wonder whether this proposal is really made to help with Mr. Minister Jin-Woo Lee's political activities and if they really want to provide him financial support. Or, do they simply want to make money? Since Mr. Minister Jin-Woo Lee's father will be involved, maybe what he told me is true…'

After gazing outside of the window, he turned around and started walking around in his office.

'What am I going to do? GH Mobile is a second vendor company in the automobile parts manufacturing industry. This is an opportunity to become a first vendor company in the home appliance manufacturing industry. Maybe I should go for it. I don't want to give 15% of my company's shares, but I can make way more money by doing this. We will add 750 million won to the capital, but once the company is registered with KOSDAQ, its value will jump to 7.5 billion won.

I will have to give at least 3% of the shares to President Jang-Hwan Song. I have to compensate for his hard work in increasing the sales revenue and building up our current management system. That is what I promised him when he joined this company anyway.

After giving 15% to Mr. Minister Jin-Woo Lee's father and 3% to President Song, I will be left with 82%. I haven't recovered any investment funds that I had put into GH Mobile yet. Should I go for it? Or not? Should I?'

Gun-Ho continued walking around in his office for quite a while.