I Became the Youngest Daughter of a Chaebol Family-Chapter 7: A Corporation Belongs to Its Shareholders

“I’m... going to buy Daehwa Electronics stock.”

A bluff.

Stock investment in this era wasn’t exactly an efficient way to make money. Never mind the fact that the stock exchange had only just begun operating properly—not only was the volatility enormous, but the system itself was too complicated and risky.

If you wanted to make money in this period, land speculation was the way to go. The myth of real estate being invincible had a long, rich history in South Korea.

But...

Money wasn’t the point. As I’ve said again and again, money is something I can earn anytime.

Daehwa Electronics’ current market cap was maybe a few hundred billion won at most. If I dumped all the money I had into it... I could easily grab about 5% equity.

As of 2010, Daehwa Electronics’ market cap hit around 100 trillion. That kind of valuable stake was something I could only get now.

Later on, the family wouldn’t even allow me to buy stock in Daehwa Electronics. If it weren’t for the present, when no one even considered the idea of a hostile takeover, I’d never get a foothold to interfere in management at all.

“Stock? Why would you buy that?”

I saw the face of Chairman Yoo Seong-pil frown as he asked. That expression clearly said, “What the hell’s gotten into this kid?”

I calmly plastered a smile on my face like a mask.

“I’m still young, you know. Starting a business now would be too difficult. But I also don’t want to do something stupid like parking it in a bank account...”

Drawing it out, I scanned the faces of the family sitting at the table. I hadn’t noticed it before because I’d been keeping my head bowed the whole time, but now that I looked around...

It seemed doable.

‘Inheriting doesn’t suit me. I’ll take it by force.’

No matter how much of a genius I was, no matter how brilliant my talent, Chairman Yoo Seong-pil would never name me the next chairman.

It would obviously cause a mess. He’d just carve out a few subsidiaries and hand them over. Like in my previous life, when Daehwa Group eventually split apart.

So... I’d have to take it. What else could I do?

Just like I decided at Yoo Jin-cheol’s funeral—I wanted to devour all of Daehwa Group.

Tsk. If I could, I’d rather buy Everland.

“Hmph. Didn’t you say you wanted to start a business last time, Ha-yeon?”

I did. And I still planned to.

“Later. Probably once I’m in middle or high school... but that’s still a long way off, right? Until then, I’ll just help you with your work, Grandpa.”

“Why? You not confident?”

“No, it’s not that. It’s a matter of efficiency. Mm. If you put it that way, I guess you could say I’m not confident. I mean, there’s no way I could beat you in the semiconductor industry. Not right now.”

I said it with a bright smile. Maybe he liked what he heard—because Chairman Yoo Seong-pil’s face broke into a wide grin.

“Hahaha! Yeah, that’s right. So you’re certain semiconductors will work out, too?”

“Yes. If I were in college, I’d gather people, get investment, and develop memory semiconductors myself. But I’m still a kid, you know? Plus, I’ve got poor stamina, so... Mm. It can’t be helped right now.”

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Even though I was mentally an adult, my body was still that of a soft, fragile child. I had to sleep ten hours a day just to function.

I let out a little fake cough.

“Actually, I was going to try. Up until I saw the news last month. They said you succeeded in developing 64K DRAM, right? As soon as I saw that, I realized—no matter what other industry I enter, I won’t be able to catch up with that one.”

Of course, that was a complete lie. I was just flattering Chairman Yoo Seong-pil to make him feel good.

“...?”

Yoo Jin-seok tilted his head slightly at what I said, but Chairman Yoo Seong-pil was different.

He laughed heartily, grinning from ear to ear like he’d become a completely different person.

“Exactly! Semiconductors—this stuff is different! Just like people die if they can’t eat, electronics die if they don’t have semiconductors. And if you mass-produce these things in a factory, it’s a total gold mine, isn’t it?”

“Hehe. Right? I’m glad I studied so hard—it’s nice to see you happy, Grandpa.”

Of course, I was the only one reacting to that. The other grandkids were still too young to understand, and even Yoo Jin-seok and Yoo Jin-ha didn’t really grasp the weight of what had just been said.

Until now, the technology gap between Daehwa Electronics and the leading semiconductor firms had been a full ten years. In a high-tech industry, a ten-year gap is a death sentence.

Especially for a South Korean company that didn’t even rank among the advanced nations—if the gap didn’t grow wider, that alone would be a miracle.

But... Daehwa Group had managed to close that gap to three years by developing the 64K DRAM. And seven years later, in 1990, they would develop the 16M DRAM and reduce the gap to zero. Daehwa Electronics becoming Korea’s number one company was inevitable.

“But why stock? Buying stock doesn’t mean you’re investing in the semiconductor industry. The investment capital comes from elsewhere. Stock is completely separate. You didn’t know that?”

Chairman Yoo Seong-pil asked, eyeing me with suspicion. It was a fair question.

But I was a child—and I had an unbeatable cheat code.

Just playing dumb.

“Uh... it is? But a corporation belongs to its shareholders, right? So if I buy stock in Daehwa Electronics, I get voting rights and can participate in business decisions. That means I’m part of the business.”

Technically right, technically wrong. Yes, a corporation does belong to its shareholders—but... in South Korea, it’s a little different.

Usually, the owner family that holds a tiny fraction of the stock ends up with all the management rights. And whenever there’s a new stock issuance or a spin-off, they use those rights to sweep up shareholder money.

So what can shareholders do when the owner fattens his own wallet with their money?

To put it bluntly: nothing. That’s why the Korean stock market tanked.

...In the U.S., this kind of thing is impossible. Actually, it shouldn’t be possible in Korea either.

Even if you’re the founder of a company, once it’s listed, you’re just a major shareholder with influence. Taking shareholder money to hand it to yourself as the founder? That’s obviously absurd.

But in Korea, it happens. Why? Hell if I know.

“Hah. You want to go into business with me?”

“Yes. Like I said, I can’t beat you, Grandpa. So what choice do I have? I’ll have to join you. Or you could subcontract me a piece of the foundry division.”

TSMC in Taiwan would be founded soon with a similar motto: Never compete with the customer.

Just like that, I tried to slide one foot into Grandpa’s semiconductor business—but Chairman Yoo Seong-pil sliced right through my logic.

“You’ve done more research than I thought. Too bad you missed the most important part.”

“Oh? What was that? I may be smart, but I’m still a desk-bound student—I don’t know everything.”

“You can’t even reach the desk, you little brat, but your mouth sure works fine. Why would I give management rights to you? And you’re still a minor. Even if the company’s listed, you can’t buy stock without my permission.”

“Really? Then what’s the correct answer, Grandpa?”

Still wearing an innocent, clueless expression, I looked up at Chairman Yoo Seong-pil—right after casually skirting the most sensitive issue in a chaebol family: succession.

“You can start a business after you graduate elementary school. For now, just buy some land over in Gangnam, or if you’ve got a good eye, target one of the new towns and grab something in Gyeonggi Province.”

I stuck my lip out in mock annoyance and pouted.

“Then I’ll just do both. Buy land and buy stock.”

“What the hell do you think I just said?”

Chairman Yoo Seong-pil let out a hollow laugh like he couldn’t believe it. He had just told me not to buy stock, and here I was ignoring him and acting like a child.

“Still, I want to buy stock. Stocks are cool. I’ve always wanted to own some...”

Seeing me say that with sparkling, childlike eyes, Chairman Yoo Seong-pil tilted his head in mild confusion... then gave in.

“Well, do as you please. Sometimes when I talk to you, I can’t tell if you’re a six-year-old brat or a battle-hardened snake. Then something like this happens, and you’re definitely just a kid...”

“Hehe. Love you, Grandpa!”

Ahh, this is the life.

This is why being a kid is the best.

This translation is the intellectual property of Novelight.

***

The plan I made at my father’s funeral was simple.

To seize control of Daehwa Group’s management through a hostile M&A. M&A stands for mergers and acquisitions—in Korean, insuhapbyeong—and usually, companies transfer ownership through mutual agreement between both parties.

But hostile M&A is different. It exploits the fact that shares in a publicly listed company can be bought and sold at any time... to forcibly take control of management.

Because a corporation belongs to its shareholders.

The unique circular ownership structure of chaebol conglomerates is what makes this possible. Originally, it was a kind of magical system designed to allow control over an entire company with only a small portion of shares—but conversely, even someone taking over the company can use just a portion of shares to attempt a hostile M&A.

Daehwa Group’s circular ownership is fairly complex, but the core concept is simple: affiliates are arranged so they are each other’s largest shareholders.

And because stock can be owned not only by individuals but also by companies, it means using corporate money to buy stock.

There’s no need to overcomplicate it—let me just explain with a simple example.

Let’s say I’m the major shareholder of Company A.

But Company A is the major shareholder of Company B. Then, as the major shareholder of Company A, I naturally also become the major shareholder of Company B. After all, B belongs to A.

Now, let’s say Company B is the major shareholder of Company C. Following the same logic, I don’t just own Company B—I also own Company C.

Of course, [N O V E L I G H T] it would never stop with just three affiliates. In a chaebol group, dozens of affiliates are tangled up like this.

In other words, as long as I can control the key Company A at the center, I can become the major shareholder of the entire group!

Up to this point, it’s all fine. This structure is called a holding company, and it’s considered a relatively sound method.

But...

If Company C becomes the major shareholder of Company A, things start to get weird. That’s circular shareholding.

A controls B, B controls C, and C controls A. In this bizarre triangle, the number of shares the owner needs to maintain control over management gradually decreases.

To put it in extreme terms, the owner of the group could own only 3% of the total shares and still become the chairman of every single affiliate—exerting power over the entire group like it’s their personal property.

In other words...

If I acquire just 3%, I can devour Daehwa Group.

All of it.