Story of a Big Player from Gangnam

Gun-Ho arrived at the grilled fish restaurant where he was supposed to meet Jong-Suk. President Jong-Suk Park was already there sitting at a table waiting for Gun-Ho. He saw Gun-Ho first, and he raised his hand as Gun-Ho entered the restaurant.

“Over here.”

“Hey. Did you order for us already?”

“No, I was waiting for you, so we can order together.”

President Jong-Suk Park handed the restaurant menu book to Gun-Ho. Gun-Ho picked several different grilled fish dishes such as mackerel, tuna, etc.

After they placed their order, Gun-Ho said, “President Park, you know that I decided to sell my ownership interest in Dyeon Korea, right?”

“What? What about me? What’s going to happen to me then?”

“What does me selling the ownership interest in Dyeon Korea have to do with you?”

“Dyeon Korea is GH Machines’ major client. We are building and selling machines to them.”

“You don’t have to worry about it. Whoever takes over my ownership interest, Dyeon Korea will continue to do business with GH Machines. And, they have Director Kim who you are very close to, oh, I should refer to him as Vice President Kim since he will soon be promoted to vice president.”

“Huh? Director Kim will be promoted to vice president?”

“Yeah, as of December 15th, he will be Dyeon Korea’s vice president. We haven’t made it official yet, so just keep it to yourself until then.”

“Hmm, really?”

“Director Kim will be vice president, and Manager Hee-Yeol Yoo will be promoted to a director position. The chief research officer will no longer work with us, and the rest of the executive officers will stay with the same positions.”

“What about the president?”

“Lymondell Dyeon is supposed to appoint someone and let us know it on the 15th. I think Mr. Adam Castler will be Dyeon Korea’s next president.”

“Will GH Mobile announce their promotions on December 15th as well?”

“Yeah, same as Dyeon Korea. Its chief research officer will be promoted from director to senior director, and the production manager in team 1 will become director.”

“Yeah, I don’t see any surprises there.”

“And, starting on December 15th, GH Mobile will be run by President Song alone. I’m resigning from the president position this time.”

“What? What does that mean?”

“I will sit back as chairman. For Dyeon Korea, I will hold the chairman position of its board of directors until the acquisition is completed.”

“Chairman? Yeah, you should have done that sooner. It didn’t sound right when you and I are holding the same job title—president.”

“Does chairman sound better?”

“Of course! GH is a group that is composed of many companies already. It’s very natural that you take the group’s chairman position. I feel somewhat better and relieved that you decided to take the chairman position. Well, I guess I will have to start showing you more respect from now on, Mr. Chairman.”

“Stop being silly.”

“No, I’m serious, bro. We have to think about the people around us. Well, Mr. Chairman, would you like to have a glass of beer?”

“No, I can’t. I have to go to Dyeon Korea after lunch.”

“I guess Director Kim, well, I mean Vice President Kim will miss you a lot if you don’t show up in Dyeon Korea any longer.”

“W Group will take over my ownership interest in Dyeon Korea, so Dyeon Korea will do just fine. With their already-established network in sales, Dyeon Korea will grow faster and also grow substantially.”

“Oh, it is W Group that will acquire Dyeon Korea, huh? Wow.”

“Maybe it’s better for the employees there.”

“Well, I guess Director Kim should be happy about the acquisition. He used to work for a mid-size company—Mulpasaneop—as its senior director, and he is about to be the vice president of one of W Group’s companies. That’s a big jump in his career.”

“President Park, I don’t want you to feel sad or disappointed about me selling Dyeon Korea. Your business will not be affected by it. Dyeon Korea’s machines cannot be built by any company, but only GH Machines has necessary technology and know-hows on how to build them.”

“Speaking of which, we shipped the machines to Guangdong Province already. Our plant manager will be there to install them. After testing those machines, Dyeon Korea’s new factory there will be ready to start their business in no time. I’ve noticed that that location’s president is someone by the name of Hyeong-Woo Lee and that he has no experience with manufacturing facilities. Will it be okay?”

“Dyeon Korea will probably send someone there, who is experienced and who can help the president with running the factory.”

“Dyeon Korea’s sales revenue increased a lot this year, right?”

“It generated 84.5 billion won.”

“84.5 billion won? Wow. That’s impressive. What about GH Mobile?”

“GH Mobile made 187.4 billion won.”

“187.4 billion won? Wow. How much profit did it make then?”

“Its net earnings after tax is 13.3 billion won.”

“Whoa. You can distribute all of the profit among shareholders as dividends, right?”

“I haven’t decided what to do with that fund. I can pay for the company’s debt with it, or I can set aside the required reserve and distribute about 10 billion won among the shareholders as dividends.”

“You said that President Song has some ownership interest in GH Mobile, right?”

“Yeah. He owns 3%. So, he will be able to receive about 300 million won for his dividend this year.”

“300 million won? Wow, that’s huge.”

“You can grow GH Machines like that. You own 20% of GH Machines, so if GH Machines generates as much as GH Mobile does, you can take your dividend of 2 billion won.”

“Wow, 2 billion won, huh? Well, the reality is that even GH Machines’ sales revenue is less than GH Mobile’s net earnings. How long will it take for me to grow GH Machines like GH Mobile?”

“Why don’t you hire someone who can only devote himself to sales? Also, take advantage of Dyeon Korea’s Vice President Kim. Think about giving him a commission if he brings you a client or makes some connections between a client and GH Machines for you.”

“A commission? Hmm, that sounds a very good idea. You will no longer own Dyeon Korea anyway, so maybe I can use some of his time and effort.”

Gun-Ho went to Dyeon Korea after lunch.

As he was entering his office, he asked Secretary Seon-Hye Yee to bring him a cup of coffee instead of jujube tea. While having his coffee, Gun-Ho made a call to the internal auditor through the interphone; it seemed that something occurred to him.

“Did you send our response to the request for a public announcement?”

“Give me one second, sir. I will verify it with the staff who is in charge of stock. I told her to make the announcement earlier. I’m not sure if she completed it or not.”

“If she hasn’t made it yet, then tell her to do it tomorrow around 11 am. We still have time until noon tomorrow, I believe.”

“Yes, sir.”

After a moment, the internal auditor came into Gun-Ho’s office.

“She hasn’t made the announcement yet. So, I told her to do it tomorrow at 11 am as you instructed, sir.”

“Good.”

After the internal auditor left the office, Gun-Ho smiled faintly.

‘If we make the public announcement about the acquisition rumors tomorrow, Dyeon Korea’s stock price will maintain its upper limit at least today.’

Gun-Ho was finishing his coffee when the soon-to-be Vice President Kim entered the office.

“Oh, Mr. Vice President Kim, please come in.”

“Umm, sir. I do appreciate that you are promoting me to vice president. But, I’m a bit disappointed as well, sir.”

“Why are you disappointed?”

“I’ve never expected that you would sell your ownership interest in Dyeon Korea.”

“Don’t be. Dyeon Korea will become a part of a large company, which is really nice. Since I haven’t received the payment for the acquisition yet, I can’t be sure yet, but, if the deal goes through, you will all be part of W Group. I think that’s better for everyone.”

“Maybe it’s better for other employees, but probably not for me. The new owner would possibly want their person in the vice president position.”