An Investor Who Sees The Future

Park Si-hyeong initially thought he had finally knelt down when he heard that OTK Company was depositing 200 billion won into Hoseong Savings Bank.

However, Kang Jin-hoo struck a blow by exposing the bank’s shortcomings, triggering a bank run. Upon realizing he had been deceived, Park Si-hyeong felt a surge of furious anger.

Hoseong Savings Bank was managed by his father-in-law, who had enjoyed numerous benefits during his tenure.

If Hoseong Savings Bank were to collapse, and any irregularities or corruption were discovered in the process, it would lead to a significant political fallout.

Park Si-hyeong immediately dismissed Kang Jin-hoo’s statement as a rumor and tried to reassure the public, confident that he could cover up most issues.

But…

This was already far beyond what could be managed.

Park Si-hyeong turned to Cha Jong-ho and asked, “What should we do now? Tell me the plan.”

“Um, the method is…”

Why hadn’t he searched for a solution?With such massive financial issues at stake, both the management and the supervising agencies could not evade blame.

If they didn’t provide immediate financial support, Hoseong Savings Bank would collapse within a day. But providing that support meant they needed to disclose audit results, and doing so would lead to the bank’s downfall.

Thus, there was no solution.

Cha Jong-ho reluctantly opened his mouth.

“I’ll look for it.”

After sending him off, Park Si-hyeong sat back down, lost in thought.

He had overcome numerous crises in the past. Sometimes he had evaded them with lies and deception; other times, he faced them head-on.

Businesses and the media were on his side, while the opposition party was inept.

While opinions might differ about whether he was a great president, he had certainly provided clear rewards for his supporters.

He had offered various privileges to corporations, pardoned those who supported him politically and economically, removed real estate regulations to raise property prices, and allocated as much budget as possible to districts held by the ruling party.

Thanks to this, despite numerous controversies, many citizens still supported him.

Many people don’t feel directly affected by the government’s waste of 10 trillion won in taxes. Issues like media control, parachute appointments, and election interference are primarily political concerns. Illegal surveillance or investigations against civilians don’t matter to most unless they are personally impacted.

However, losing my own money is an entirely different issue.

If bankruptcy becomes a reality, local residents will face direct and significant financial losses. If this leads to a crisis in the local economy, the damage will spread even further.

Currently, customers of Hoseong Savings Bank are solely looking to the president, waiting for operations to resume. They are a key support base for the ruling party.

“How did it come to this?”

The answer is clear: the management of Hoseong Savings Bank concealed its insolvency, and the government agency responsible for oversight failed in its duties.

However, Park Si-hyeong found a different reason.

“After the earthquake…”

Given that no one knew until now, it was at least not an immediately apparent insolvency.

If it had been hidden well and managed cautiously, perhaps a crisis could have been averted during the administration’s term? Yet, the whole situation was unveiled by a single comment from Kang Jin-hoo.

Park Si-hyeong gritted his teeth.

“Did he know this would happen from the beginning?”

***

The media plays a vital public role in checking power and fulfilling the public’s right to know, but it is, after all, a private enterprise.

When the government applies pressure and businesses cut off advertisements, they have no means to endure.

From the early days of his term, Park Si-hyung has adeptly managed the media with a mix of carrots and sticks, resulting in most mainstream media becoming loyal mouthpieces for the government.

Among these, the Joongilbo has shown the strongest pro-government stance, having a personal conflict with OTK Company.

Therefore, regarding the current situation, the Joongilbo has framed it from the beginning as a conflict between speculative capital intending to disrupt the financial market for profit and the government trying to protect the public from harm, aligning its articles accordingly.

OTK Company claimed it had not invested in any derivatives associated with this issue, but the Joongilbo argued that, due to the nature of the company being located in a tax haven, it could easily have conducted transactions through shell companies. In short, the lack of evidence itself is presented as evidence.

Next to the article criticizing Kang Jin-hoo, there was a prominent advertisement for Hoseong Savings Bank, boldly stating, “Thank you sincerely to our valued customers for your trust and patience. We will strive to be a more beloved Hoseong Savings Bank.”

***

An emergency discussion was organized on TV.

The topic was, of course, the Hoseong Savings Bank situation.

Experts and Congressmans from both parties debated fiercely. During this, as the topic of bank runs arose, Congressman Kim Han-cheol from the Korean party spoke in a firm tone.

“It’s an issue to spread malicious rumors, but it’s also a problem to believe and follow them without critical thinking. A bank run is a kind of self-fulfilling prophecy. A bank doesn’t collapse because of a bank run; rather, it collapses because of the bank run itself. If no one withdraws money, there’s no problem, yet problems arise because everyone rushes to withdraw.”

Congressman Yoon Chan-young from the New Politics Party immediately retorted.

“What’s wrong with a bank run? Banks threaten with collection as soon as loan interest is just a few days late, yet why is it the customers’ fault for wanting their own money back?”

“Is there any bank on earth that can withstand a bank run? Are we supposed to tell banks to keep all the deposited money in safes and not lend a single penny?”

“I agree that no bank can endure a bank run. However, a solid bank doesn’t collapse immediately when one occurs. If depositors observe that the bank can still give out money even during a rush, the bank run will naturally stop. Isn’t it problematic that they couldn’t hold out even for a day before going into suspension?”

Member Kim Han-Cheol exclaimed sharply,

“Then are you saying, Representative Yoon Chan-young, that Kang Jin-hoo is correct and not the government announcement? What on earth is Kang Jin-hoo? A young man who hasn’t even graduated from college, and people rush to the banks to withdraw money based on his words—it strikes me as quite lemming-like. You know, those rodents that act in groups.”

Throughout the debate, Representative Yoon Chan-young had been speaking calmly, but for the first time, he raised his voice.

“Are you saying that depositors are lemmings? Is that something a member of the National Assembly elected by the people should say?”

Realizing his words might have crossed a line, Kim Han-Cheol quickly clarified,

“Oh, no, I wasn’t trying to belittle the depositors. I meant that the real issue is Kang Jin-hoo, who incited them.”

Then he turned to the moderator with a smile, saying,

“Please edit this part out when it airs.”

The moderator looked at him with a bewildered expression.

“We’re currently live on air.”

“…….”

***

The government initially stated that the investigation period would last ten days and promised to provide an interim announcement as soon as possible.

The reason there was no significant chaos despite the business suspension was that depositors trusted the government and the media and chose to wait.

However, as a week passed without any news, anxiety began to grow.

Market merchants, including Kim Soon-rye, gathered in one place.

“When will we resume operations?”

“This is strange. Why hasn’t anyone said anything?”

“What if something really happens?”

One merchant spoke up.

“There’s no need to worry. The government has assured they will cover up to 50 million won per person without fail.”

Then another merchant shouted irritably.

“Who doesn’t know that? But is that really a solution? What about amounts over that?”

Given that it was a savings bank that had operated in the area for a long time, many people had large sums of money deposited. They were feeling even more uneasy.

Park Yong-cheol, who ran a hardware store, tried to calm the merchants.

“Just wait a bit. The government must be working on a plan.”

Kim Soon-rye said to Park Yong-cheol,

“You said you graduated from college, right?”

“Yes, ma’am.”

Kim Soon-rye showed him her bankbook.

“Then take a look at this. I heard it’s similar to a deposit. Can I get compensation for this?”

Park Yong-cheol took the two bankbooks and checked the amounts.

“You split it into 43 million won each. Deposits are guaranteed up to 50 million won per person, so don’t worry, ma’am.”

At that, Kim Soon-rye let out a sigh of relief.

“I knew it would be fine. That’s a relief. Thank goodness.”

However, his expression hardened as he examined the bank statement.

“Wait a moment. This is not a deposit; it’s a subordinated bond.”

Kim Soon-rye blinked in confusion and asked, “Isn’t that the same as a deposit?”

Park Yong-cheol looked up and asked the merchants, “Are there any of you who bought subordinated bonds here?”

About ten merchants raised their hands.

“I got it because they said it offered high interest.”

“When I went to open a deposit, they encouraged me to get this.”

“Last time I was there, the staff recommended it as a good option.”

Most of the merchants were elderly, having operated in the market for decades. They likely had no idea what a subordinated bond was and simply signed on because the bank employee said it was a good deal.

“You can only get your money back if the bank is stable until maturity. If it goes bankrupt earlier, you won’t receive a single penny.”

The merchants were taken aback by that statement.

“What does that mean? Why can’t we get compensation? Isn’t there something called the deposit protection law?”

Park Yong-cheol replied with exasperation, “The deposit protection law only applies to deposits, not bonds. Subordinated bonds are just as risky as stocks.”

Kim Soon-rye grasped Park Yong-cheol’s shoulders as if to shake him.

“What, what happens to my money then?”

Eighty-six million won might seem like a small amount to some.

But Park Yong-cheol, who had worked in the same market, knew better than anyone how Kim Soon-rye had saved that money.

“Well, if we resume operations, there shouldn’t be a problem…”

“What if not? I mean, what happens if the bank can’t open?”

“…”

He couldn’t bring himself to say anything, and Kim Soon-rye collapsed onto the spot as if she had fainted.

***

News Break displayed videos on its website and YouTube channels.

As an online media outlet, it might usually have been overshadowed by mainstream media, but this time was different.

The entire nation’s attention was already focused on the Hoseong Savings Bank situation, resulting in a surge in visitor numbers.

Jin Yeojun, the CEO, and Jo Woojin, the reporter, spoke in front of the camera as if hosting a radio show.

Jin Yeojun was the first to speak.

“We’ve prepared a special feature on ‘President vs. Otaku’ part two. As everyone knows, this situation arose due to comments made by Kang Jin-hoo, the CEO of OTK Company. He has also been questioned as a suspect by the prosecution a few days ago.”

Jo Woojin nodded.

“If he had simply stated that there were suspicions about insolvency, it might have passed without much attention. But he outright said to withdraw money from Hoseong Savings Bank. If the insolvency is not clarified, there’s a possibility he could be arrested.”

“So depending on the outcome, either Kang Jin-hoo might be arrested, or Hoseong Savings Bank could go bankrupt—one of the two. Personally, I’d prefer that Kang Jin-hoo be wrong because the impact on ordinary citizens would be tremendous if Hoseong Savings Bank goes under.”

“Exactly. Hoseong Savings Bank is currently the second-largest in the savings bank sector. If things go wrong, it could lead to a regional economic collapse.”

“Before we move on to the main news, I have the prospectus for the subordinated bonds sold by Hoseong Savings Bank. If you look here, it clearly states that the interest rate is 5.6% per year. The interest is to be paid quarterly at 1.4%, and it includes information on the issuance amount, date, maturity, and subscription unit. The important part is at the very end.”

Jin Yeojun held up the prospectus to the camera. At the bottom, there was tiny text that was barely readable.

“You probably can’t see it at all. In fact, I can’t see it well either. The text is less than 1 millimeter, and you’d need a magnifying glass to read it. Anyway, it states that ‘Subordinated bonds have a lower repayment priority than ordinary bonds, so please be aware. This bond is not protected by the Depositor Protection Act, and the risk of failure to repay principal and interest falls on the investor.’ Do you know what this means?”

Jo Woojin explained.

“Hoseong Savings Bank can return up to 50 million won per person even in the event of bankruptcy. If the bank runs out of money, the Korea Deposit Insurance Corporation is obligated to cover that amount. So, if you deposited 80 million won, you would lose 30 million won, but still receive 50 million won. However, subordinate bonds don’t have such protection. If the bank goes under, that’s it; you might not get a single penny back.”

“But these scoundrels… I mean, the employees of Hoseong Savings Bank sold these to customers even the day before closing. If someone had financial knowledge and understood what subordinate bonds were, I could understand. But most purchasers are elderly. They think these are similar to regular deposits.”

“When selling financial products, customers must be adequately informed about the product’s basics and investment risks. This is highly likely to be a case of incomplete selling.”

“Subordinate bonds are a problem, but there’s an even more crucial issue at hand. Before diving into the specifics, let’s summarize the situation. The first statement from Kang Jin-hoo came around 7 PM. At that point, the bank had already closed. Shocked customers tried to access online banking to withdraw their money, but the site and app crashed within 10 minutes due to a surge of users. After that, access was completely denied.”

Jo Woo-jin nodded.

“It should be viewed that Hoseong Savings Bank blocked access to prevent an online bank run.”

“So the next morning, customers rushed to the bank, but it had just opened and then closed again, entering a suspension of operations.”

“Ordinary customers barely managed to retrieve their deposits.”

Jin Yeo-jun looked at the camera and said,

“Now, here’s the crucial point. What happened between Kang Jin-hoo’s statement and the next morning? We have obtained some shocking information. It will surprise you.”