Chapter 119: The Sovereign Shield

A defense industry company refers to any enterprise involved in equipment and facilities related to national defense as required by the state.

In Korea, it’s common for the government to summon the chairmen of large conglomerates, urging them to enter the defense sector under the guise of patriotism, or to distribute contracts to small and medium-sized companies as a means of nurturing them.

“Junghyuk, when you say defense industry…”

“For Taeseong, there’s no need to cling to domestic military procurement alone. We should aim for a system that produces both civilian and military goods for supply, right?”

Defense materials production systems are generally divided into three categories.

One supplies the military even in peacetime, another produces both military and civilian goods simultaneously, and the last manufactures civilian goods during peacetime but switches to military supplies only in times of war.

“It’d be even better if we took on fields that require advanced technical prowess.”

For example, armored vehicles, tanks, warships, and fighter jets.

When it comes to Taeseong, it’s all about technology.

That’s precisely why I’m so intent on acquiring Ukwang Research Institute.

While each of Taeseong’s subsidiaries has its own R&D team, they don’t operate a dedicated, professional research institute.

“Grandfather, you must have been under a lot of pressure all this time. From the Blue House, I mean.”

For a moment, Grandfather’s eyes sank deep.

Judging by how he couldn’t bring himself to deny it, he must have been bearing quite a burden all along.

“Unlike Ukwang, Taeseong focused on technology development and facility investment. That’s why, even if we stood our ground, we never really fell out of favor with the Blue House. Have you ever wondered why?”

It’s probably because the government has certain expectations of us.

“When the government prioritized heavy and chemical industries, I guess if you were a major conglomerate, you were practically forced to take part?”

“That’s right.”

“As a result, Taeseong jumped into chemicals and automobiles, while Ukwang took on steel and shipbuilding?”

“Correct.”

“I’ve always wondered why Taeseong chose automobiles and chemicals in particular.”

I traced my fingers over the Ukwang Chemical documents.

“Here in Korea, Hyunmu Chemical already succeeded in developing dynamite on its own, so it’s shouldering a big part of the defense sector.”

“Junghyuk.”

“There’s something else I’m curious about. Why would Ukwang, which was more active than Taeseong in participating in the government’s industrial vertical integration plan, now be targeting Taeseong Chemical?”

Ukwang was aggressive in lobbying and was the country’s top example of business-politics collusion.

If such a company is now baring its claws seven years after jointly establishing a chemical firm with Taeseong…

“It means the government is gritting its teeth and pushing the defense industry hard. Isn’t that so?”

“That’s right.”

“Ukwang is taking this as an opportunity, trying to aggressively overcome its crisis through defense industry contracts?”

“There’s no way to fill the deficits that have piled up in steel.”

In short, they wanted to use the national defense budget to patch up their leaky pockets.

“Phew. This damned country, where a businessman can’t focus solely on business.”

Grandfather let out a low sigh.

Then he slowly nodded.

“It’s time for Taeseong to make a decision. At this rate, we might even be forced into developing nuclear weapons.”

“So that’s why you decided to hand over Taeseong Chemical—which you’ve nurtured so carefully—to Ukwang without hesitation?”

“…!”

Grandfather’s jaw dropped.

Then he whipped his head toward Secretary Kim.

“Secretary Kim, is this…?”

“It wasn’t me, sir.”

“Then President Shim?”

“It wouldn’t be him either. You know what he’s like.”

Only then did Grandfather turn back to me, his eyes trembling.

“Does that mean Junghyuk figured all this out by himself?”

Who would ever tell something like this to an eight-year-old?

“This isn’t the time to worry about that. We have to decide whether Taeseong will definitely leap into the defense industry.”

“Yes, this is the limit. We’re at a dead end.”

“If we can’t avoid it, then we should jump in with confidence and make sure we get a proper piece.”

“A proper piece, you say?”

“You said it earlier, didn’t you? ‘If you have to weather the coldest frost in the dead of winter, it’s always the biggest one who survives when the chaff all dies out.’ Let’s become the giant of the defense industry, Grandfather.”

“…Huh?”

I grinned.

“So what if we’re not good at politics, or not the best at lobbying? If Taeseong gets so big that the whole defense industry could collapse if we fall, no one will dare touch us.”

“…!”

“Why do you think the Ministry of National Defense is always clamoring for more firepower and greater firepower?”

It’s all because of the Korean War.

A veteran once wrote this in his notebook during the 6.25 War.

-If only we had tanks, too.

“The Republic of Korea is a nation in armistice. Even if we get shaken by an oil crisis or a war breaks out, do you really think the government will cut the defense budget?”

No way.

“In a crisis, defense spending is the one thing that always increases.”

“With North Korea watching for any opening, there’s no way the government can ignore defense, whatever else they might let slide.”

For the same reason, the President will soon hold a press conference to announce the development of various weapons.

“If we have to go into the defense industry anyway, we should set our sights on exports, too.”

“Exports in the defense sector? Is that even possible?”

“There’s no reason it can’t be, right?”

I grinned.

“Does Taeseong lack factories, a distribution network, or technology?”

Like all the big conglomerates of this era, Taeseong grew bigger through exports.

Especially the distribution business, overseen by my second uncle, was strong enough to warrant separate overseas branches, thanks to exports.

President Shim was being given a seat to oversee all trade and distribution.

‘Soon, there will be large and small international conflicts breaking out. In March, Israel will invade southern Lebanon to crush Palestinian terrorist groups.’

That same month, Italy’s Red Brigades will kidnap former Prime Minister Aldo Moro.

In April, when the US exerts pressure with Korai-gate, the President will make a show of attending performance tests of domestically developed, high-performance tanks.

Then there will be a military coup in the Republic of Afghanistan, with the president and his family killed and a communist dictatorship taking over.

By May, Iranian students will begin anti-government protests, and by August, 477 people will die in clashes with military police. That’s the start of the Iranian Revolution.

And thus, the second oil shock will erupt.

‘There’s only one year left before the oil crisis hits and Yukong comes up for sale.’

There’s no way I or Taeseong alone could buy Yukong with just the money we have.

We’ll need foreign loans—there’s no way around it.

‘You can’t go abroad begging for loans empty-handed, can you? Of course, you have to offer them something tempting and propose a win-win deal.’

I grinned.

“After the Middle East war, Saudi Arabia championed resource nationalism and began pouring overflowing petrodollars into defense and construction, right?”

That’s how the Middle East construction boom of the 1980s began.

And that’s not all.

All the way into the 21st century, the Middle East will pour astronomical sums into its defense budgets.

Just look at a single year: the US spends $800 billion, China $300 billion, and Saudi Arabia $68 billion on defense.

‘Right now, in the Middle East, which is desperate to kick out Western powers, they’re scrambling for weapons—they simply can’t get enough.’

You name the price, and it’s a seller’s market; it was so hot that the one who scooped up the easy money was king.

“I’ll make sure we sell well.”

Wherever there’s war, it’s always the arms dealers who make a fortune.

Right now, the Middle East is the world’s greatest powder keg.

Clap. Clap. Clap. Clap.

Who was making that applause?

While Grandfather simply gaped, letting out a hollow laugh, Secretary Kim was so impressed that he started applauding with perfect composure.

“As expected of our young master! Young master, you truly have a plan for everything!”

***

Only after a thorough body search did the Blue House security officer reach out his hand.

Chairman Cha produced the Blue House luncheon invitation he had brought.

“Chairman Cha of Taeseong Group and President Cha of Taeseong Construction, please come inside.”

The Blue House security officers opened the doors to the banquet hall.

A massive round table, large enough to seat at least thirty people, was revealed.

Each seat at the round table had a nameplate.

The name of Taeseong Group’s Chairman Cha was placed relatively close to the host’s seat of honor, while Taeseong Construction’s Cha Seongjun’s name was at the very end.

“Chairman Cha, welcome.”

The other chairmen who had arrived first raised their hands in greeting.

It was the chairmen of Samhwang, Ilseong, Roxan, Geumjo, Hyunmu, Cheonma, and Sangguk.

“Did you hear? I heard yesterday’s New Year’s briefing was a disaster.”

“Yes, I heard the military and administrative leadership implicated in the Ukwang Construction bribery scandal were put through the wringer.”

“They got caught red-handed, so there’s no way they’d get off lightly. On the other hand, the Blue House Chief of Security, Chief Secretary, the Director of the Central Intelligence Agency, and the Army Security Commander were all offered three glasses of wine each by His Excellency.”

Chairman Jo of Geumjo lowered his voice even further.

“They say it was a reward for governing cleanly with patriotism and integrity, even after reaching such high positions.”

Chairman Oh of Hyunmu chimed in quietly.

“Thanks to that, His Excellency’s trust in them has only grown. I hear they’ll all be in attendance at today’s Blue House luncheon as well.”

“High-level officials, including Mayor Gu, are expected to line the walls like a folding screen, I hear?”

“They leaked that info on purpose, so it’d get to our ears.”

Chairman Kang of Roxan cleared his throat.

“His Excellency is warning us: if we pull any stunts like Ukwang, we’ll be punished.”

“It seems they’ve decided to pick apart the sunken Ukwang.”

“Otherwise, why call in the military and administrative leadership to this high-level luncheon?”

The heads of the groups exchanged subtle looks of anticipation.

“Even if the insiders try to pick apart Ukwang, there’s a limit.”

“They’ll make a killing from stocks and bow out. But the company remains.”

“The stock price may plunge to the bottom and then rebound suddenly, so there’ll be some losses, sure.”

The insiders were the leaders of the military and administration.

What they wanted was money, not management control.

But the conglomerate heads wanted management rights and the business interests.

“If Ukwang collapses, the national economy could fall apart. We can’t let that happen.”

“For the sake of this nation’s economy and industrial progress, I’m ready to step up and take the lead.”

“That’s probably why His Excellency has gathered political and business circles together today.”

In short, they were all eyeing the opportunity to acquire Ukwang’s subsidiaries at bargain prices.

“There’s no need for us to fight amongst ourselves.”

“Let’s all play it smart and help each other out.”

A collusion formed in an instant.

Chairman Cha swallowed dryly.

“Has Chairman Kim of Ukwang not arrived yet?”

“Why would he come here?”

Chairman Jo of Geumjo snorted.

“Even if he were still at the helm, he’d probably make some excuse about being hospitalized and slip away.”

“He’d be bombarded worse than at a parliamentary hearing. How could he bear all that shame and wrath?”

Bang!

The doors to the banquet hall swung open, and compared to the other elderly chairmen, a conspicuously young man strode in.

“I am Kim Daesik of Ukwang. It’s been a while, Chairmen.”

He gave a deep bow to the group heads.

“Since my father has resigned from his position, I am attending today as the acting head of Ukwang. I look forward to your guidance.”

“Daesik.”

“Chairman Cha, you’re here as well.”

Kim Daesik of Ukwang glanced at Cha Seongjun of Taeseong Construction, then turned back to Chairman Cha with a smile.

“My apologies regarding the broken engagement with Seongjun… in many ways.”

His expression and tone betrayed no hint of regret.

“Daesik, things aren’t looking good today.”

“I’m aware.”

“It’d be best if you left before His Excellency arrives. What could a thirty-seven-year-old rookie who hasn’t even taken the helm at Ukwang do here?”

“It’s precisely because I haven’t yet taken the helm that I came.”

Kim Daesik of Ukwang straightened his suit.

“I have no intention of cowering behind my father like a coward. I must at least try to stop Ukwang from being torn to pieces.”

“Daesik.”

“A broken engagement shouldn’t mean broken business as well, should it?”

Tap tap.

“Silence! His Excellency is here!”

The gathered group heads shot to their feet, bowing all at once.

“Your Excellency!”

Behind the President followed the Blue House Chief of Security and Chief Secretary.

The Director of the Central Intelligence Agency, the Army Security Commander, and the rest of the military and administration’s leadership entered in step.

“Your Excellency, I am guilty of a grave crime!”

Kim Daesik of Ukwang dropped to his knees, pressing his forehead to the floor.

“……”

A heavy silence fell over the banquet hall.

Of everyone present, only one person was flat on the floor in a deep full-body bow.