Story of a Big Player from Gangnam

The accounting manager of Mulpasaneop was having another hectic day in preparing documents to submit to the court.

Gun-Ho approached her with a smile.

“Manager Kim, is there anything I can help you with?”

“No, I’m good. Thank you.”

“I can do a data entry job to the accounting program.”

“What? You know how to use the accounting application?”

“I know how to use Douzone.”

“Really?”

The accounting manager looked at Gun-Ho in surprise.

“I once used to work in the accounting department of a company.”

“I see.”

Manager Kim hesitated to ask Gun-Ho to do some work for her though.

“It’s okay. I can handle them on my own for now. I will let you know if I need help.”

“By the way, do you happen to know the president’s son’s phone number? I heard he used to work here as a vice president before he left for China.”

The accounting manager was hesitant for a second, and then she looked at her note. She probably didn’t save his number in her cell phone.

“Here it is. If he is using the same number, this has to be the one. But please don’t tell anyone that you got this number from me.”

Gun-Ho made a call to the president’s son. Someone answered the phone after the phone was ringing for quite a while.

“Hak-Seon Oh?”

“Yes, this is he.”

“My name is Gun-Ho Goo. I am working with President Se-Young Oh of Mulpasaneop. Is this a good time to talk?”

“Are you the new managing director by any chance?”

“Yes, I am.”

“What is this in regards to?”

“I’d like to meet you in person. Where are you located now?”

“I am in Samsung Town. I’m helping my friend with his business now.”

“I will come to Seoul then.”

“Can you come to Bundang District instead? I am staying there. I can meet you there this evening. It’s easier to drive from Asan City as well.”

“No problem. I will come to Jeongja Town in Bundang then. Can we meet at Jeongja Station at 7 pm then?”

“Okay. I will see you there.”

Gun-Ho met with Mulpasaneop president’s son at a café in Jeongja Town, Bundang District.

The president’s son seemed to be about two years younger than Gun-Ho. He looked like someone who had spent his childhood in an affluent family without any hardship in his life. They greeted each other.

“I’ve heard a new managing director joined Mulpasaneop. I expected to see someone a bit older than you though.”

“You look very young yourself as well.”

“How is the company?”

“The court examiners are still reviewing the company. We will soon see the outcome of their investigation.”

“I see.”

“I wanted to talk to you about the factory in China. I’d like to know how you want to handle it. Mulpasaneop invested over 10 billion won outside Korea and hasn’t received anything in return yet.”

“Whew.”

The son let out a deep sigh before he responded to Gun-Ho’s question.

“We should have sold the factory in China already so Mulpasaneop could get something out of it, but that didn’t happen. Have you ever tried to sell it?”

“I did try to sell it, but the potential buyers all offered a ridiculously low price. I couldn’t sell it for that price.”

“I’ve visited the factory in Suzhou City, Jiangsu Province myself. The factory is now taken over by the workers. Are the machines the only assets of the company?”

“We have also some moulds and testing machines like a compressor.”

“I’m sorry to tell you this, but the current assets of the company in China wouldn’t be worth over 300 million won. Since the company is leasing the place, the company’s actual assets would be the security deposit, machines, and some left-over raw materials.”

The president’s son seemed to feel thirsty; he ordered a coke and gulped it down.

“People are wondering what I did with Mulpasaneop’s fund of 10 billion won. I didn’t use all of it to buy machines. I had to pay for the raw materials to produce products as well.”

“If you produced products with raw materials, you should have some sales revenue.”

“We manufactured so many defective products, and some of our customers filed bankruptcy so we couldn’t get paid from them.”

“How much accounts receivable do you have?”

“About 100 million won. It has been seized because of the worker’s unpaid wage claims.”

“What about accounts payable? How much do you have then?

“About 800 million won. The 400 million won of it is owed to our suppliers like the raw material supplier. The remaining 300 million won is for overdue wages. Once we pay and receive all these, we will be left with negative 700 million won.”

“If someone wants to buy the factory, they will have to value the moulds and your customers. Your customers are all big companies.”

“What if the customers want to change their vendors?”

“They wouldn’t. Our customers are currently importing goods because our factory couldn’t supply their necessary products. They would be happy to see them if we could produce products again.”

“Hmm.”

Gun-Ho was thinking with his arms crossed and then asked,

“How much do you want to sell the factory for? Assuming there is a buyer who is interested in buying your factory.”

“I’m thinking of 300 million won.”

“If that potential buyer buys your company for 300 million won, he would have to take over negative 700 million won. So, that buyer would end up paying 1 billion won to buy your factory.”

“Umm… Yes.”

“If someone has 1 billion won, do you think that person would buy your company with that money? Don’t you think that person would do something more fun and lucrative rather than buying your troubling company that has a lot of issues?”

“Whew.”

The president’s son let out another deep sigh.

“You also need to consider this as well. If Mulpasaneop is sold off in pieces, it would put this factory at high risk. This factory has been receiving help and support from Mulpasaneop so far for free. You wouldn’t even be able to ask for someone in Mulpasaneop to repair or maintain the machines in your factory. You sometimes used Mulpasaneop’s raw materials when you had to, but that wouldn’t be possible any longer.”

The son drank up his glass of coke again.

The son said quietly,

“People think I wasted 10 billion recklessly on the business in China, but that was not what really happened. I’ve received raw materials from Mulpasaneop, and Mulpasaneop recorded the price of materials higher than their actual value. All of our machines in the factory were assembled with Mulpasaneop’s used machines, but we recorded it like we purchased brand new machines.”

“What do you think was the reason for Mulpasaneop’s collapse?”

“They were not zealous enough to effectively conduct the business. There were way too many employees who were not necessary, but the company kept them all without restructuring the departments or personnel. Also, there were so many unnecessary high ranked executives who were receiving a high salary. They didn’t re-evaluate the price of products for too long. The luck was not on their side either.”

“It seems like someone wants to buy Mulpasaneop for 2 billion won.”

The son laughed hollowly.

“A company with 70 billion won sales revenue is collapsing too easily.”

“If your father doesn’t sell the company now when there is a buyer, and if the court receivership is not approved, you and your father will become a person with a bad credit score.”

“A person with a bad credit score?”

“You borrowed 3 billion won from Korea Credit Guarantee Fund with the company’s name, right?”

“Yes, I remember that.”

“You and your father are the joint surety for Mulpasaneop for that amount of 3 billion won personally with Korea Credit Guarantee Fund. If Mulpasaneop can’t pay for it, Korea Credit Guarantee Fund will seize your personal assets and file a lawsuit against you.”

The son screamed while grabbing his hair with his hands in despair.