Inside the Blue House presidential office, with a large glass window overlooking the steep rocky cliffs of Inwangsan, President Kim Jae-chun sat on the sofa, flanked by Chief Secretary Woo Chun-il and Deputy Prime Minister for Economy Cheon Byung-soo. The atmosphere in the room was heavy, as if to signal the president's displeasure.
President Kim, with a stiff and hardened expression, turned toward Deputy Prime Minister Cheon and spoke sharply.
"Is it true that everything reported in the Geumseong Ilbo article is factual?"
Cheon swallowed dryly under the president's piercing gaze. He wiped sweat stains from his palm on his trousers and replied hesitantly,
"Well… regrettably, upon investigation, it appears that the Rothschild Fund, which was entrusted with the Hansan Group restructuring, promised to invest a $1 billion bridge loan but has only brought in $345 million."
Chief Secretary Woo, sitting opposite, showed an incredulous expression.
"Wasn't the deal to entrust the Rothschild Fund with the Hansan Group restructuring on the condition that they first invest $1 billion to normalize the group?"
"That is correct."
"Hmm. And yet, they have invested less than half of the promised amount so far."
Woo himself had been one of the early proponents when the Rothschild Fund's proposal first came in. Now, seeing them subtly backtrack as if nothing had ever been promised left Deputy Prime Minister Cheon quietly frustrated. However, knowing there was no gain in arguing at the moment, he pressed on, watching the president's still tense expression.
"What's even more serious is that there are major issues during the restructuring and sale process as well."
"And what are those?" the president asked.
When President Kim Jae-chun furrowed his brows and asked, Deputy Prime Minister Cheon Byung-soo explained the newly uncovered facts with a troubled expression.
He confirmed that immediately after Hansan Group's default, its total debt stood at 6.1894 trillion won. To facilitate a smooth sale, creditors agreed to write off 3.8137 trillion won, leaving the remaining debt to be handled. Among that, 1.5325 trillion won was agreed to be borne by the Rothschild Fund.
President Kim interjected, frowning, "Isn't that 1.5 trillion won the promised $1 billion bridge loan?"
Cheon hesitated before answering cautiously, "Yes, sir. Before the sale negotiations, creditors demanded full repayment of the bridge loan. The Rothschild Fund attempted to raise the shortfall through domestic banks beyond the $345 million already brought in."
The president's anger flared sharply, "Not only did they fail to bring in the promised amount of foreign currency, but they also siphoned off loan funds meant for domestic companies from the banks to cover the bridge loan!"
Cheon shrank under the booming rebuke, affirming, "That is correct."
Chief Secretary Woo Chun-il asked, "So banks knowingly lent money even while aware of the Rothschild Fund's manipulations?"
Cheon answered with a weary sigh, "Not only small and medium enterprises but even the top 10 conglomerates have excessively high debt ratios. Banks want to lend but are almost incapable of extending new loans."
President Kim clicked his tongue, "Is this because of the IMF?"
Cheon replied, "Yes. Banks are required to strictly maintain the BIS capital adequacy ratio. This makes it extremely difficult for them to lend to domestic companies whose creditworthiness has sharply declined."
In summary, the legacy of the IMF crisis continues to pressure Korean banks. The strict adherence to BIS capital ratios amid weak corporate credit has severely restricted lending capacity. This has forced banks to ration loans cautiously despite the economy's need, contributing to tightening credit conditions and impacting corporate financing.
President Kim Jae-chun scowled and picked up the thread of the conversation.
"So, in contrast, foreign investors like the Rothschild Fund can get loans simply because they have high credit ratings, is that it?"
"…Yes," Cheon Byung-soo replied, bowing his head like a guilty man despite having done nothing wrong.
President Kim, who had been suppressing his boiling anger, finally lost his composure and erupted.
"We opened our doors to attract foreign capital, and instead of bringing in dollars, they borrow from our domestic banks to snatch up the prime companies we've painstakingly built—at bargain prices? What kind of damned situation is this?!"
He slammed the sofa's armrest repeatedly with his palm, veins standing out on his neck.
Beside him, Chief Secretary Woo Chun-il spoke in a grave tone.
"Now that it's been revealed the Debt Restructuring Fund—under Rothschild Fund management—provided nearly 200 billion won to Hansan Group affiliates, there's no way we'll avoid public outrage over capital flight."
President Kim snorted in fury.
"If I feel this about to make my blood boil, how could the public stay calm after hearing this? That would be the strange part."
Frowning deeply, he turned on Cheon Byung-soo, who sat looking like a man on pins and needles, and lashed out in an angry voice.
"What the hell were you doing instead of stopping this kind of scheme before it happened?!"
There was some unfairness to the rebuke, but Cheon could not deny that oversight and control had failed. He kept his head bowed.
"I have no excuse, sir."
President Kim's expression grew even more displeased.
"If this is how it is, then the early suppression of last time's Manyeong Machinery strike—when we used state power—will no longer look like an unavoidable necessity to overcome the foreign exchange crisis. It will look like our government was played by the Rothschild Fund's manipulations!"
That had not been the intent, but in effect, that was exactly what had happened.
Still seething, President Kim pounded the sofa's armrest again and again.
"How pathetic the people will think this government and I am. And the opposition party—this will be a golden opportunity for them to attack us without mercy!"
Deputy Prime Minister Cheon Byung-soo endured the president's unending rebuke in silence, head bowed like a criminal, as though each word were a lash.
After venting for quite a while, President Kim Jae-chun finally steadied his ragged breathing, his shoulders heaving.
"Terminate the contract entrusting the management of the Debt Restructuring Fund immediately. Halt the sale of Hansan Group's affiliates and start the review again from scratch."
Cheon looked up in surprise.
"There have indeed been irregularities with the fund's management, so terminating the contract is justified… But perhaps we should reconsider the matter of Hansan Group once more."
President Kim's voice sharpened as he narrowed his eyes.
"You're suggesting that even though they've pulled this stunt—lying to the government, selling off our companies at high prices with our own money—we should just stand by and watch?"
Cheon replied carefully, "I'm just as angry about what the Rothschild Fund has done. But with the Russian crisis and Japan's bad-loan problem already undermining market stability, the exchange rate is once again under pressure. If we put the brakes on the sale of Hansan Group affiliates now, the ripple effects could be unpredictable."
President Kim's expression hardened.
"So you're saying that imposing sanctions on the Rothschild Fund might make it harder to attract foreign capital?"
"That's correct," Cheon answered grimly.
The president shot his eyebrows up.
"You mean to tell me that the Korean government has to tiptoe around because we can't handle a single fund?"
Cheon responded, "We haven't fully escaped the foreign exchange crisis. If foreign investment were to flee again, the consequences could be disastrous."
After a brief pause, he added with gravity, "We've already seen from Russia what the worst-case scenario looks like."
At this, President Kim's brows twitched, sensing the seriousness of the warning.
It was then that Chief Secretary Woo Jae-chun cautiously interjected,
"As the Deputy Prime Minister says, there is a risk of damaging our ability to attract foreign capital. It might be better, for now, to press the Rothschild Fund to honor its original commitments and try to untangle this as smoothly as possible."
Arms crossed, President Kim sat deep in thought for a long moment before finally lifting his head.
"Just proceed as I initially ordered."
"But…" Cheon began.
Deputy Prime Minister Cheon Byung-soo leaned forward, about to speak hastily, but President Kim Jae-chun raised a hand to stop him.
In a voice that was calm yet heavy, the president said,
"If this hadn't blown up into such a big issue, it might be different—but now the entire nation knows. If we just let this slide, what do you think public opinion will be?"
"That's…" Cheon trailed off, wearing a troubled expression.
Watching him, President Kim slowly leaned back in his seat.
"Dozens of companies are still shutting their doors every month, and countless workers are being laid off—forced to leave the jobs they've held for years. Yet to overcome the national crisis of the foreign exchange meltdown, people are enduring that suffering, accepting it as an unavoidable sacrifice. But if they begin to think that all their hardship has only lined the pockets of foreign speculators like the Rothschild Fund, the political landscape will be thrown into chaos."
The Korean people were not enduring this harsh period without protest merely out of blind obedience. Despite deep pain and crushing despair, they were making sacrifices with a single determination—to overcome what was being called the worst national crisis since the Korean War and to rise again.
It didn't take much imagination to foresee what would happen if they realized that their sacrifice had merely enriched foreign profiteers—anger as deep as the pain they had endured would erupt all at once.
With an uncharacteristically grave expression, President Kim said,
"If that happens, the very justification for the government's aggressive restructuring drive will vanish, won't it?"
"…"
"In the worst-case scenario, we could lose the entire driving force of national governance and sink into a lame-duck presidency from the very start of my term. Could you take responsibility for that?"
Cheon felt the urge to say it was an exaggeration, but he knew the possibility wasn't zero. Avoiding the president's eyes, he kept his mouth shut.
Chief Secretary Woo Chun-il, ever the politician, felt the weight of the political implications—losing control of the national agenda to the opposition—far more keenly than any economic consequences.
"Still, we can't simply ignore the sensitivities of foreign investors," Kim continued. "So, instruct the prosecutors to uncover every immoral and illegal act the Rothschild Fund committed during the Debt Restructuring Fund operations and the Hansan Group restructuring process."
"Wouldn't that just make the scandal grow even bigger and turn against us?" Woo asked.
President Kim's eyes flashed sharply.
"At first, we'll take some heat—but the more wrongdoing is exposed, the more the blame will shift from us to the Rothschild Fund. No— we must make sure it shifts."
As a long-time confidant, Woo instantly caught the president's intent.
"You mean to use the prosecution's investigation both to redirect public outrage toward the Rothschild Fund and to demonstrate to foreign investors the legitimacy of imposing sanctions on them."
President Kim Jae-chun gave a slight nod, then turned his gaze to Deputy Prime Minister Cheon Byung-soo.
"Even so, attracting foreign capital may slow compared to before—so find a way to encourage foreign investment."
Cheon nearly sighed inwardly. They were already exhausting every possible method to draw in foreign funds, and now he was being asked to come up with yet another plan.
Still, he knew that the Rothschild Fund had crossed the line far too severely for the government to simply look the other way. There was no choice but to answer.
"…Understood."
Inside, however, he cursed the Rothschild Fund for making an already headache-inducing situation even worse.
Damn bastards!