After finishing the negotiations with the Hess board,
I had a modest drinking session with David and Dimon.
"Boss! You've worked hard. To bring Hess into the Taewoo Group—it was unthinkable just ten years ago."
"That's thanks to David's persistent efforts over the decade."
"Certainly, even though Taewoo Group is a Korean company, in American political circles, it's often viewed as an American company. It's invested so much there, and the chairman is also an honorary American citizen."
They were spending astronomical amounts of money every year to maintain relations with the U.S.
Not only lobbying politicians, but also investing huge sums in factory construction and other ventures in the United States.
Of course, it was an investment because they could earn plenty in return; this acquisition of Hess was only possible because of those prior commitments.
"Now that the negotiations are over, we'll establish the consortium. The Fintech bank and Citi Group have already secured the funding, and we've been informed that all the IT companies have their finances ready, too."
"We should be able to acquire both Hess and Chesapeake within this year."
"Boss, when do you plan to start acquiring Chesapeake? The Chesapeake board has repeatedly contacted us, expressing their wish to negotiate with you directly."
Chesapeake was even more urgent than Hess.
While Hess was a sizable target and could withstand pressure,
Chesapeake's history was relatively short, and it lacked the resilience to survive the era of low oil prices.
"Since we're in the U.S., we should meet with the Chesapeake board as well before we leave."
"Actually, boss, you don't necessarily have to handle it yourself. I can take care of negotiations on my end, or even President Han could manage it. Chesapeake has nowhere else to turn but us."
"Still, we should give them some final courtesy."
"Then, before starting the negotiations, I'll coordinate the terms on my end."
"Make sure it's generous. Also, unofficially kick in some extra retirement benefits. We have to handle it discreetly so the Hess board doesn't catch wind of it."
Chesapeake had been a partner company of ours.
And if we hadn't encouraged the development of Texas shale gas, they wouldn't be in such a difficult situation now.
That's why I felt a bit sorry.
I intended to repay that feeling of guilt with unofficial retirement benefits.
"I'll make sure they're well taken care of enough to have no worries in retirement. But the atmosphere at Chesapeake isn't one of resentment toward you, boss. Rather, there's a strong sense of relief that they have Taewoo Group to lean on."
"That's unexpected."
"There's talk that if Taewoo Group becomes the parent company, they'll be able to develop shale gas not only in Texas but also in other regions."
"That's not wrong. We do intend to proceed with shale gas development as much as Chesapeake wants."
The era of low oil prices would continue for years to come.
But that didn't mean shale gas development could stop.
Low oil prices wouldn't last forever, so they had to push development now to gain big profits when crude prices rose.
"I'll make sure to convey that message when I meet the Chesapeake board."
"Not immediately, but around the second half of next year, we will acquire several oil companies on the brink of bankruptcy. So please prepare for that."
"If the current low oil price era lasts until the second half of next year, countless companies will go bankrupt. We won't have much trouble acquiring them even without separate preparation, but I'll get everything ready in advance anyway."
The era of high oil prices like before would not return.
But prices would rise somewhat from the current level.
Once oil prices stabilised, the value of oil companies would increase.
To make substantial profits or to sell the companies for gains, it was necessary to accept losses for about two years and acquire oil companies by the next year.
"Of course, oil prices will rise somewhat by the first half of next year. But they won't recover to previous levels, so oil companies will continue to accumulate deficits."
"It's disappointing to hear that prices will only start rising in the first half of next year. You could profit from betting long on crude oil futures, but it won't match the gains from short selling."
"You can just engage in other short selling to make up for it."
"You always have a plan! What's next?"
Dimon's eyes lit up.
Understandably, he had made significant profits from the oil price drop, and the thought of not being able to do that anymore must have been painful to him.
"Until the first half of next year, we'll make modest profits from rising oil prices, and from the second half, we'll target China."
"There's plenty to gain in China!"
"It won't be easy. Unlike Japan or the U.S., it's not an open market, so access might be difficult."
"If we know the exact stocks and timing, I'm confident I could make money even in North Korea, which is more closed off than China!"
Dimon bounced with excitement.
But since this wouldn't start right away, I calmed him down.
"I'll share the exact stocks and timing soon, so please focus on the consortium and the oil price rise project for now."
"I can focus with a joyful heart."
Dimon regained his composure, finding relief in the emergence of new opportunities.
I was confident I could keep feeding this kind of opportunity into his mouth for at least ten years, and after ten years, I could build a system that would bring in money on its own without my direct involvement.
***
November 2014 was incredibly busy.
I stayed in the U.S. to finalise negotiations with Chesapeake, and now I had flown to China to acquire a 20% stake in the Guyana fund owned by the Chinese oil company CNOOC.
"Chairman Kim, you've arrived! It's so nice to see you often."
"I'm honored to see you frequently as well, President Li Gang."
Li Gang's expression was bright.
It seemed he had thoroughly completed the assignment he was given.
"CNOOC has decided to sell the Guyana fund to the Taewoo Group."
"That must not have been easy. You worked hard."
"It wasn't that difficult. Since CNOOC still has deep ties with the Chinese government, the party moved decisively, and they quickly expressed their intention to sell."
"We owe this to President Li Gang's efforts."
"Oil prices are still falling, and CNOOC's deficits are mounting, so there was no need to push hard for it."
"We will buy the shares at market price. However, could the premium cost be paid as a donation to the Princeling faction instead of CNOOC?"
Why would Li Gang go through the trouble?
Ultimately, it was to move toward the center of power, and the huge donations needed to flow into the Princeling faction for Li Gang to benefit as well.
"If you proceed that way, I can only be grateful."
"I will prepare a donation amount that does not tarnish President Li Gang's name."
"Hahaha, I enjoy talking with Chairman Kim because we understand each other so well."
"I also feel comfortable and glad, as if I've known President Li Gang for a long time."
Flattery was easy enough to give.
If I could gain an advantage with some cheap praise costing no money, what was so difficult about speaking a few sweet words?
"If you ever need my help in the future, please don't hesitate to contact me. If it's Chairman Kim calling, I'll get up even if I'm asleep."
"Do you happen to have connections with shipping companies or shipowners as well?"
"Of course I do. But are you interested in shipping companies?"
"Not at the moment. But I might become interested soon, so I'm mentioning it now. When that time comes, may I ask for your help, President Li?"
The bankruptcy of Hyunjin Shipping was imminent.
If Taewoo Group were to acquire Hyunjin Shipping, negotiations with Chinese shipowners would be necessary.
Hyunjin Shipping had charter hire contracts worth huge sums not only with Europe and the U.S. but also with Chinese shipowners.
To renew those charter hire contracts, support—or even pressure—from the Chinese government would be required.
"If Chairman Kim requests it, of course I'll comply. Please don't hesitate to contact me. I should build strong ties with shipowners early on anyway."
"Taewoo Group will fully cover your activity expenses."
"Since meeting Chairman Kim, everything has been going so smoothly."
Li Gang was mistaken in thinking he was the one receiving help.
The one truly being helped was me—more precisely, I was using him.
But since he was so happy to be used, that was only to my advantage.
After finishing schedules in the U.S. and China, I returned to Korea.
Immediately upon returning, I called President Han in for a meeting.
"Did you come straight from the airport? You must be jet-lagged; it would be good to rest a little."
"I slept well on the plane. How is the consortium coming along?"
"The consortium was established while you were in China, and the acquisition agreement will be signed by December."
Consortium preparations usually took months or even up to a year.
But since this consortium involved parties closely related to the Taewoo Group, it was completed in a short time.
"Now that the consortium is established, we should cease short-selling."
"In fact, Taewoo Securities stopped short selling starting this week. The other financial firms in the Financial Tower are still continuing short selling."
"You seem to be feeling jealous."
"Honestly, it hurts a little. Others are making money while we do nothing but twiddle our thumbs, and I've been going to the restroom more than three times a day out of frustration."
"Soon, oil prices will stabilize. So, selling off all inventory early is not a bad choice. The few financial firms that greedily hold on until the end won't be able to sell all their stocks and will suffer big losses."
Gambling and oil futures trading were similar.
There were countless cases of people shouting, "Just one more round", and ending up ruined.
It was a game where success came to those who exited quickly, even if it meant taking a slight loss.
"As you said, Chairman, we are preparing to invest in rising oil prices starting next year."
"Even if we don't make as much profit as during the oil price drop, we should still make decent returns."
"And whether this is good news or bad, there's a rumor going around on Wall Street."
"What rumor?"
President Han was wearing a subtle smile.
When I gestured, he scratched his head and began to speak.
"It seems the short-sellers have taken the bait we laid out."
"So the bait catches fish after all."
The bait we laid was the acquisition of oil companies.
We spread rumours on Wall Street that the Taewoo Group's finances were drained from acquiring a large American oil company.
"They say the short-sellers are launching a massive attack on Taewoo Group's subsidiaries, which acquired the oil company."
"Taewoo Trading will be the target then."
"I wouldn't worry if it were other affiliates, but since it's Taewoo Trading, I'm concerned. Rocket, the e-commerce business, and Mining Resources are all running huge deficits. Adding an oil company will only increase the deficit."
I understood President Han's concern.
Rocket, the internet commerce business, was running deficits worth hundreds of billions of won,
And Mining Resources was suffering deficits in the trillions, putting immense pressure on them compared to the other affiliates.
"When has short-selling ever moved according to performance? It always comes down to money."
"That may be true, but the person leading the short-sellers is Jim Chanos."
"The king of short selling is very angry, it seems."
Jim Chanos, who had attacked Tesla before,
Had once suffered big losses and retreated due to Taewoo Group's massive backing.
So he harboured resentment against Taewoo Group and seemed to think now was the right time to strike.
"When the king of short selling moves, several private equity funds follow suit. Are you sure it's okay?"
"It doesn't matter. This will be a chance to show what it means to crush someone with money."
If the battleground was Taewoo Trading, it was actually advantageous for us.
Officially, Taewoo Group held only 40% of Taewoo Trading,
But in reality, I controlled over 70% of the shares.
Trying to attack Taewoo Trading with the remaining 30% of shares?
I was confident I would make the king of short-selling experience failure once again.