[Prosecution Expands Investigation into Accounting Fraud at ST Group]
[ST Global Caught in ₩1 Trillion-Scale Accounting Fraud]
[Declining Creditworthiness Leads to Surge in ST Affiliate Corporate Bond Sell-Offs, Buyers Vanish]
[ST Group Credit Rating 'Shaken.' Stock Price Also in Freefall with No Visible Bottom]
[Multiple Key Executives of ST Group Under Prosecutorial Investigation]
[Evidence Emerges of Chairman Moon Byung-kwon's Involvement in Accounting Fraud — Will ST Group Face a Prolonged Leadership Vacuum?]
[National Tax Service Plans Special Investigation into Chaebol Accounting Fraud — Stock Decline Continues, Rebound Uncertain]
[ST Affiliates Plunge. ST -9.5%, Global -7.1%]
↳ Damn, I thought there was no room left for this to fall, but it's dropping again ㅠㅠ
↳ They said refinery stocks would skyrocket if oil prices rose!! Where's the guy who said that now?
↳ I kept averaging down and ended up losing everything ㅠㅠ It's really over now
↳ I had so many chances to cut my losses, but I held on till the end—my fingers are legendary
↳ This isn't heading toward delisting, right? Hey… it's not, right?
↳ If I can't deposit margin tomorrow, I'll get force-liquidated… looks like my life's getting liquidated too
↳ Guess we should all go check the temperature of the Han River together
↳ ₩1 trillion in accounting fraud? That's not a company—that's a criminal organization
↳ Because of ST Group, other stocks are crashing too. What an absolute nuisance
As the seized ledgers were analyzed, it was revealed that accounting fraud had been carried out on a massive scale at the group level. Evidence also surfaced that, along with illegal loans from financial institutions, enormous slush funds had been secretly created and used to lobby political and government circles. In response, the prosecution significantly reinforced its investigative team and expanded the scope of the investigation.
Moreover, the scandal spread to other major conglomerates such as Sasung, TG, and HW, putting the entire business world on edge.
In fact, when those groups were reported by civic organizations over allegations of unfair internal transactions, accounting fraud, and illicit transfers of wealth to major shareholders—and the prosecution officially launched investigations—the domestic stock market was hit with a severe downturn as well.
Ring—! Ring—!
"Buy 9,000 shares of ST at 11,000 won!"
"In a newly released investment report, Morgan Stanley has downgraded ST Telecom's rating from 'overweight' to 'equal-weight,' and sharply lowered its target price from 220,000 won to 150,000 won."
"ST Telecom's stock is widening its losses and is on the verge of breaking below 140,000 won!"
At the report from Assistant Manager Go Sung-gyu, who had newly joined the Asset Management Department, Director Choi Ho-geun—standing with his arms crossed in one corner of the office, dressed in a gray suit—murmured as he looked at the large market display board installed at the front.
"As the investigation progresses, the scale of the accounting fraud keeps increasing. Even if it's a blue-chip company, ST Telecom won't be able to avoid the impact, so a downward revision of the target price was inevitable."
Department Head Jung Hwan-yeop, standing beside him with his shirt sleeves rolled up, responded.
"The cost of handling the massive volume of appraisal rights that poured in during the merger with ST IMT—well over 600 billion won—must have also acted as a negative factor."
Well aware of shareholder dissatisfaction caused by the falling stock price, ST Telecom hurriedly announced that it would buy back and cancel 3% of its treasury shares.
However, it was not enough to calm the market's distrust and the investors' anxiety over how far this situation might escalate.
"Another factor dragging down the stock price is the possibility that ST Global—where accounting fraud has been uncovered—may liquidate all of its ST Telecom shares to secure funds."
[ST Telecom: 140,120 (▼28,120)]
"How many Telecom shares does Global hold?"
"As far as I know, about 2.3 million shares, which is roughly 2.73% of the total stake."
Director Choi Ho-geun let out a small snort and spoke bluntly.
"They're not buying treasury shares to defend the stock price—they're effectively helping ST Global secure cash. No wonder investors aren't impressed."
"Still, wouldn't it be better for Telecom to purchase them via a block deal rather than having all 2.3 million shares dumped directly onto the market? At least it would soften the impact a bit."
Director Choi Ho-geun replied in a disinterested tone.
"That may be true. But they already have to spend over 600 billion won to handle the appraisal rights, and if they go ahead and buy back another 2.3 million shares, that's another massive outflow of cash. No matter how well ST Telecom earns, won't that seriously drain their reserves?"
"That's true. It's not like they have an unlimited pile of cash sitting in the vault."
With both hands shoved into his trouser pockets, Director Choi Ho-geun continued.
"On top of that, there are even talks that they're negotiating to sell Global's dedicated line business unit to ST Telecom for 350 billion won. That's only going to dry up their cash reserves even further."
Department Head Jung Hwan-yeop smacked his lips and replied.
"It's basically the telecom division footing the bill for the mess created by the group's top management."
Director Choi Ho-geun let out a derisive snort as he spoke.
"Exactly. That's why the quick-witted foreign investors are the first to dump their shares and run, isn't it?"
As soon as the owner risk and breach of fiduciary duty issues surfaced, foreign investors had rapidly sold off large amounts of ST Group stocks, including ST Telecom. Recalling that, Department Head Jung Hwan-yeop wore a regretful expression.
"In the end, it's the retail investors who end up taking all the losses again."
Director Choi Ho-geun responded with a bitter look.
"They're bound to be slower in getting information compared to others, so it can't be helped."
Jung Hwan-yeop also knew all too well that, in the jungle-like stock market where only the strong survive, individual investors are always prey for foreign capital and market manipulators. The thought left a bitter taste in his mouth.
Then, shifting his gaze, he checked the stock price of ST Co., which had been plunging day after day along with other ST Group stocks on the market board, and spoke in a slightly concerned tone.
"With the owner risk and the trillion-won accounting fraud issue overlapping, if this continues, it looks like ST's stock won't even be able to hold the 10,000 won range. Wouldn't it be better to pause the buying for now and observe the situation?"
"I told the Chairman the exact same thing."
Director Choi Ho-geun shrugged as he replied.
"Oh, really? What did he say?"
"He said it could drop by another half from here, but we should proceed with the purchases as planned regardless."
Hearing this, Department Head Jung Hwan-yeop was startled, his eyes widening in shock.
"If it halves… does that mean it could fall to the 5,000 won range?"
Director Choi Ho-geun slowly nodded with a grave expression.
"Then shouldn't we stop the purchases even now?"
Department Head Jung Hwan-yeop asked with an urgent expression.
Pausing for a moment, Director Choi Ho-geun recalled the conversation he had with Seok-won earlier that morning in the chairman's office.
"Not just foreign investors—even institutions that had been watching the situation are now completely turning to panic selling. At this rate, it'll be difficult to hold even 10,000 won—no, even 9,000 won."
At that, Seok-won, who was seated at the center of the sofa with one leg crossed, replied calmly.
"That's likely. With the credit rating downgrade and the accounting fraud coming to light, and once the valuation losses from our subsidiary ST Global are reflected, the preliminary figures for operating profit and net income for the first quarter will fall significantly short of expectations. For the time being, it'll be hard to escape the downward trend."
Director Choi Ho-geun leaned forward slightly and asked cautiously.
"Then how about we pause the buying for now and resume accumulation once the stock falls further and a bottom is somewhat confirmed?"
Seok-won interlaced his fingers with both hands and leaned back.
"Even if we buy at the current price, there won't be any major issue in making a profit, so it doesn't matter."
"...."
"On the contrary, right now—when everyone is busy dumping their shares—it's the perfect opportunity to quietly sweep up shares without drawing attention."
Seeing Director Choi Ho-geun's puzzled expression, Seok-won continued speaking in a relaxed tone.
"With accounting fraud exceeding one trillion won already exposed, how do you think the creditor banks that extended massive loans to ST Group—including ST Global—will react?"
After thinking for a moment, Director Choi Ho-geun replied.
"In that case, they might refuse to extend the loan maturities in preparation for a potential default… or in the worst case, they could move to recall the loans."
Seok-won gave a slight smile, as if to say that was the correct answer.
"With this incident, their external creditworthiness has been severely damaged, making it difficult to raise funds elsewhere. In that situation, if demands for loan repayment come in as well, ST Group won't be able to hold out any longer and will default on the spot."
Although there were many cash-generating core affiliates like ST Telecom, the group's debt ratio had also risen significantly due to large-scale mergers, acquisitions, and investments carried out over time.
ST Global alone, which is currently at the center of the issue, had accumulated 2.4 trillion won in overseas debt.
And when you add in the loans extended by domestic creditor banks, the total amount grew even larger.
"A new president has just taken office and a new administration has begun—if ST Group, which ranks among the top ten conglomerates, were to default right from the start, wouldn't the impact be enormous?"
Director Choi Ho-geun gave a small nod.
"It would certainly be a burdensome situation for the new government."
"Since the creditor banks can't help but be mindful of the Blue House, instead of recalling the loans, there's a strong chance they'll demand a high-intensity self-rescue plan along with Chairman Moon Byung-kwon's group shares as collateral."
Seok-won added with a faint curl of his lips.
"If that happens, they might be able to catch their breath from the immediate liquidity pressure, but they'll inevitably be exposed to significant risk."
"What kind of risk… are you referring to?"
"If Chairman Moon Byung-kwon pledges his shares as collateral to the creditor banks, wouldn't that effectively mean he loses his position as the controlling shareholder?"
"But wouldn't that just be a formality? He'd still retain his position as chairman, wouldn't he?"
At Director Choi Ho-geun's puzzled question, Seok-won grinned, revealing his white teeth.
"That's true. But among the major conglomerates, ST Group already has one of the weakest ownership structures due to the chairman holding the smallest stake. In that situation, if all of Chairman Moon Byung-kwon's shares are tied up as collateral, don't you think there will be those who attempt a hostile takeover?"
Realizing immediately what Seok-won was aiming for, Director Choi Ho-geun's eyes widened.
"Th-then… are you securing shares with the expectation that a control battle will break out?"
A deep smile spread across Seok-won's lips.
"That's right. The moment an external force makes a move to seize control, the stock price of ST Co., the group's holding company, will surge that very day. At that point, things like accounting fraud or debt burdens won't matter at all. As the conflict intensifies, the stock price will keep soaring."
Director Choi Ho-geun couldn't hide his admiration.
"In their effort to secure control, both sides will struggle to acquire even a single additional share—so that scenario is entirely plausible."
"When that time comes, the shares we've accumulated will become a crucial casting vote capable of determining the winner of the control battle, which will drive their value even higher."
"If that's the case, we'll be able to negotiate on favorable terms not only with ST Group but also with those aiming to take control."
Seok-won let out a short laugh as he replied.
"That's right. We weigh both sides, extract maximum benefit, and then sell our stake at the highest possible price."
Director Choi Ho-geun let out an involuntary dry laugh, then quickly grew flushed with excitement.
"If it plays out as you say, paying a few thousand won more per share right now wouldn't be a problem at all. To have already anticipated that far ahead… that's truly remarkable."
Snapping out of his recollection, Director Choi Ho-geun turned to Department Head Jung Hwan-yeop beside him and spoke.
"I'll explain the reason later, but for now, don't stop the accumulation—continue as planned."
Jung Hwan-yeop frowned slightly, then nodded as if he had no other choice.
"Understood."
Turning his gaze back to the large market display board, Director Choi Ho-geun watched as the stock price of ST Co. continued to widen its losses.
In his eyes, as he waited to see whether events would unfold as Seok-won had predicted, excitement and anticipation flickered together.