Kang Jinhoo publicly stated that he had no intention of returning the 14.97 million Toyota shares.
The Japanese public was furious, and the Japanese government was busy coming up with countermeasures. Someone had to take responsibility for the losses.
The only way to avoid responsibility was to get the shares back!
Japan mobilized all diplomatic channels and began pressuring the Korean government.
Foreign Minister Okamoto stated:
"The Japanese government expresses its strong regret over CEO Kang Jinhoo's remarks, which insult the Japanese people and negatively impact Japan-Korea relations. We urge OTK Company and the Korean government to take responsible and sincere measures immediately."
The Blue House released a statement through its spokesperson:
"OTK Company is a US company with its corporate headquarters in the United States and is a US company that invests the most in the US. Furthermore, disputes between individual companies should be resolved through litigation, and are not matters in which our government can intervene."
In fact, even if they wanted to help, there wasn't much they could do. Because of this, even the Japanese government was only demanding action unconditionally, without making any specific requests as to what or how they should do it.
At this point, the Free People's Party stepped in as a relief pitcher.
Recently, the Free People's Party had elected a new party leader. The person newly elected to the leadership position was four-term veteran lawmaker, Yeon Nakyeong. After the presidential election defeat and the imprisonment of former President Park Si-hyeong, the pro-Park and non-Park factions clashed fiercely, and thanks to that, she, with her neutral factional color, opportunistically seized power.
Having obtained the title of party leader, Representative Yeon Nakyeong rebuked with a confident tone.
"Our Free People's Party expresses serious concern about the international criticism being directed at Korea due to this incident, and the cracks appearing in Japan-Korea diplomacy. We must remember that we are the only ones who will lose if Japan-Korea relations deteriorate. What kind of money is that? Isn't it the Japanese people's retirement funds? As this is an accident caused by a mistake, OTK Company should rightfully take measures to return the shares. We ask the Blue House and the ruling party to step forward and take appropriate measures to ensure this happens."
As soon as her statement was released, the internet went into an uproar.
– Ms. Nakyeong~ Do you perhaps remember what you said when Hansoo Securities went bankrupt and the employees and shareholders were cryin' blood tears?
– I'm a minority shareholder of Hansoo Securities. After the Japanese Supreme Court ruled there was no liability for compensation, and when New Politics Party lawmakers protested to Japan, Representative Yeon Nakyeong was the one who said we should respect the Japanese court's judgment for the sake of Japan-Korea relations.
– If you're conservative, please act like a conservative. Why on earth is the conservative party siding with Japan?
– Why are we the only ones who lose if Japan-Korea relations deteriorate?
– That's right. Isn't the ROK-US alliance stronger than ever thanks to Kang Jinhoo right now?
– So, what exactly are the appropriate measures our government should take? Is it like Park Si-hyeong did, arresting Kang Jinhoo?
– Yeah, yeah. While you're at it, put him in the cell next to Park Si-hyeong. Let them reconcile this time.
Criticism from public opinion poured in, and reporters flocked to the party headquarters.
Leader Yeon Nakyeong came forward to clarify.
"Relations with Japan are very important for Korea's security. I said what I said with the intention that I hope it will be resolved amicably, so I hope you won't misunderstand."
Reporters continued to ask questions.
"During the Hansoo Securities bankruptcy, didn't you say that the political sphere shouldn't intervene in matters between companies?"
"Do you remember saying that the order error was the company's responsibility, so we should stop protesting to the Japanese government?"
"Do you have anything to say to the minority shareholders of Hansoo Securities?"
"OTK Company is a US company. What specific measures are you asking them to take?"
"Please state it clearly!"
Leader Yeon Nakyeong said, as if frustrated.
"There are people mentioning the Hansoo Securities incident, but these two cases are fundamentally different. It's difficult if you keep comparing them on the same level."
"What exactly is different?"
"Isn't the amount different? The loss from Hansoo Securities was only 120 billion won, but the loss to the Japanese public pension fund is 25 trillion won. How can you say these two are the same? If you imagine that all of Seosung Electronics shares held by the National Pension Service were transferred to a specific Japanese company, how would our people feel? I hope you can put yourselves in their shoes and understand the feelings of the Japanese people. Please think about the shock and despair the Japanese people must have felt."
"..."
The reporters who were asking questions were speechless.
– Ah, yes. Korea losing 120 billion won means Japan doesn't have to return it, but Japan losing 25 trillion won means we obviously have to return it. I listened with deep impression.
– Yes, just 120 billion won. Just that 120 billion won caused some people to lose their entire fortune, and others to jump into the Han River, you know.
– Since it's the situation of the Korean people anyway, is there any need to understand their feelings? What's important is the shock and despair felt by the Japanese people. Hahaha! Ahahaha! Son of a b*tch.
– Which country's party is that, anyway?
– As expected, Jiyukokumin Party! (Free People's Party – mimicking Japanese pronunciation)
– Leader Nakyeong, chan, sugoi! Nippon no tameni motto ganbatte! (Leader Nakyeong, great, amazing! Do your best for Japan!)
– I don't understand, but why is the opposition party leader understanding the feelings of the Japanese people?
– Was that person the leader of Korea's first opposition party? I thought she was a spokesperson for the LDP (Liberal Democratic Party of Japan).
– Maybe LDP is an abbreviation for the Liberal Democratic Party of the Free People's Party?
– Please don't misunderstand. Leader Yeon Nakyeong considers herself Japanese, so it's right for her to be patriotic.
– Why are you discouraging our Imperial subjects!?
– Will you be attending the Self-Defense Forces Foundation Day ceremony with Leader Lee Jeonghye again this year?
– So, who elected her as party leader?
– The Free People's Party is Representative Yeon Nakyeong's party! Don't ignore her again!
– They're really doing all sorts of things.
Due to the Hansoo Securities bankruptcy, minority shareholders suffered great losses, and most of the public, regardless of whether they were progressive or conservative, had antipathy towards Japan's recent hardline stance.
With just one word from Leader Yeon Nakyeong, the approval rating of the Free People's Party plummeted by 8 percent.
***
This Nishida Securities order error incident is just one of the common accidents that occur in the financial world.
However, there are three main reasons why this incident is problematic.
First, the amount is too large. Second, Toyota is a symbolic company of Japan, and third, it is the retirement assets of the Japanese people.
The biggest problem among these is the last one.
If it were just tax money that was lost to this extent, it wouldn't be much of a problem. But this is the public pension fund. It's money that the people have saved penny by penny from their meager salaries, and it's money that they are supposed to receive back after retirement.
Prime Minister Okazaki even called the US directly and requested cooperation, but was immediately refused.
"Since the CEO is Korean, please inquire with the Korean government. As a normal transaction has taken place, there is no way to do anything unless the party concerned expresses an intention to return the shares."
Japan's networks extend throughout Washington political circles, and their lobbying power is also formidable. Under normal circumstances, the US would have sided with Japan, but this time, the opponent was bad news.
Kang Jinhoo is a hero who saved the United States from crisis.
Because of this, political figures in the US, regardless of whether they are Democrats or Republicans, all felt grateful to Kang Jinhoo.
The Japanese government tried to shift responsibility to the Korean government and OTK Company, stimulating anti-Korean sentiment as much as possible. However, within Japan, criticism of the government's responsibility also poured out.
To quell public opinion, Finance Minister Matsukata directly held a press conference.
Finance Minister Matsukata answered reporters' questions, emphasizing that the Japanese government was making its best efforts to recover the shares, and that OTK Company and Kang Jinhoo, who acquired the shares using the order error and did not return them, were at fault.
"Was there a problem with the public pension fund's operation system itself?"
"Are there any measures to get the shares back?"
"Toyota shareholders are anxious."
"What is the cause of the order error at Nishida Securities?"
"Who will take responsibility for the public pension fund's losses, and how?"
"Please tell us your countermeasures!"
In response to the reporters' questions and inquiries, Finance Minister Matsukata said, as if displeased.
"The amount of loss right now is not even 1.5 percent of the total operating funds. It's like losing only 15,000 yen out of 1 million yen. This much loss can happen at any time depending on market conditions, and it can be sufficiently recovered if we manage it well in the future. So, please refrain from reporting that unnecessarily increases public concern."
Losing 15,000 yen out of 1 million yen, or losing 2.3 trillion won out of 150 trillion won, is the same in terms of percentage. But these two are completely different.
This is because the absolute amounts are astronomically different. That's why pension funds with large operating scales are desperate for even a 0.01 percent return.
Above all, is that what he should be saying after losing 2.3 trillion won of the people's retirement funds?
The Japanese people who watched the press conference literally exploded.
– Chiksho! Does he think the people are fools?
– If it's such a small amount of money, then earn it yourself and pay it back!
– Take responsibility and commit harakiri!
– Reveal what kind of deal there was between Nishida Securities and the LDP!
– Give me back my money, you bastards!
– Immediately seize the entire salaries of LDP lawmakers!
– Die! Just die!
***
While public opinion in both Korea and Japan was fluctuating, conservative groups, who usually appear around this time, also rose up.
A protest was held in front of the company after a long time. The Taegeukgi (Korean flag), the Stars and Stripes, and the Rising Sun Flag (Japanese flag) fluttered in the wind.
"Punish Kang Jinhoo for worsening the ROK-US-Japan alliance!"
"If the alliance with Japan breaks, North Korea will invade!"
"Release President Park Si-hyeong!"
"Arrest financial criminal Kang Jinhoo!"
"Speculator, step down!"
"Return the shares, you bastard!"
About 300 people gathered. Sadly, it was much less than in their heyday.
Taekgyu looked down at the scene and muttered.
"Looking at this, it seems like South Korea is a really good country."
"It's a country with freedom of assembly and demonstration."
Even though the government has changed, the people can still voice their opinions as much as they want. How many countries are like this?
Seeing how much Korean democracy has developed, I feel proud myself.
But when exactly did our country become allies with Japan? There's the ROK-US alliance, the US-Japan alliance, but there's no ROK-Japan alliance or ROK-US-Japan alliance.
I spoke with Chairman Im Jin-yong, Warren Buffett, James C. Goldman, Chase Southwell, and others. They offered congratulations and asked about future plans. I also had a call with Robert Akiyama, the Japan branch manager introduced by Hyunjoo Noona.
Until a few days ago, the largest shareholder of Toyota was the Japanese public pension fund, but now it has changed to OTK Company.
Investors worldwide showed great interest in this incident. Everyone was curious about what I would do with the 14.97 million Toyota shares.
In terms of sales, Toyota was once the world's number one, and is still ranked second after the Volkswagen Group.
Its technological prowess in existing automobiles is a given, and it is also considered a leading group in the future car competition. There were many who coveted Toyota.
Requests to sell the shares in block deals poured in from hedge funds, PEFs, IBs, competing companies, etc. Among them, the most aggressive company was Zhou Auto.
Zhou Auto is the most active in mergers and acquisitions of foreign automobile companies. They have abundant cash and have a track record of acquiring shares in Volvo and Daimler AG.
Above all, they operate Zhou Toyota, a joint venture with Toyota in China. According to the law, the shareholding is 50:50.
As such, a 10 percent stake in Toyota is bound to be a coveted prey. If they get their hands on it, they will be able to exert power at Toyota's general shareholders' meeting and control the joint venture.
Vice Chairman Wang Yichang contacted me.
[Greetings, CEO Kang Jinhoo. How have you been?]
"Yes, it's been a while."
His voice was friendly, as if nothing had happened.
[I would like to apologize once again for what happened last time. Let's forget the past and open up the future together.]
It is the nature of business to be able to join hands even with past enemies when necessary. For reference, Zhou Auto is paying CarOS 930 million dollars in installments as compensation for technology theft.
"What brings you here?"
[It's not about anything else....]
The purpose was, as expected, to sell the Toyota shares. He expressed his intention to buy all 14.97 million shares.
[We look forward to a positive response.]
"I understand."
As soon as I hung up the phone, Taekgyu asked.
"What did he say?"
"He wants to buy Toyota shares."
Taekgyu said, as if dumbfounded.
"It's not like we posted on a secondhand marketplace saying we're selling them cheap, so why are so many calls coming in?"
"That's what I'm saying."
How many calls has it been already today?
The phone rang again. I picked it up wondering who it was, and this time it was the White House.
Ronald chuckled and said.
[Unbelievable. It's so unbelievable that I can hardly believe it even after hearing it. How much more are you planning to make?]
I also laughed and said.
"I didn't expect this to happen either."
[From the Japanese Ambassador to the US to LDP congressmen, they're flocking to the White House and begging for help. It's so annoying.]
They can talk big to Korea, but they can't do that to the US, right? Asking for help is all they can do.
"I'll take care of it myself."
[What are you planning to do?]
"You'll see when the time comes."
Perhaps he sensed something in my words?
Ronald burst out laughing again.
[Prime Minister Okazaki poked the wrong person. Be merciful, since he's pitiful.]
"I understand."
[TL/n: Some words are written in Japanese cuz it's showing that the Japanese people are the one expressing themselves and there's English translation along with it)