Chapter 5. Premus Fund (2)

According to Heinrich's law, there are always signs before a major incident occurs.

It was no different before the Premus incident.

Problems and suspicions began to surface about six months ago.

I submitted a report suggesting that we should immediately halt the sale of the Premus fund and investigate the asset details.

DA Securities, being a mid-sized securities firm, had a relatively fast promotion system, and at that time, I had just been promoted to the position of manager.

My stock recommendations and analyses were quite accurate, and the number of customers who trusted me gradually increased.

However, despite several reports, no action was taken, and I confronted the department head.

"What's the problem here?"

"For the past two months, redemptions for three funds have been continuously delayed."

"That's because it takes time to liquidate assets."

"What about the allegations of illegal convertible bond transactions? After the testimony of an insider that Premus was engaging in illegal CB transactions and receiving kickbacks, three board members suddenly resigned and left the country. Doesn't that seem a bit suspicious?"

"It's all just rumors. In this industry, such things happen all the time."

"There are more than a few suspicious points that can't be dismissed as mere rumors."

"Hey, what does a newly promoted manager know? If you keep causing trouble, you'll be the one responsible if Premus gets upset."

"I don't know the extent of the problem, but if we're wrong, we could end up taking the fall. I'll write a report advising caution to investors and inform our customers."

"What? Hey! Han Miru!"

The next day.

Executive Vice President Yang Jeong-wook called me in.

Although I had seen him at various company events and in the hallways or lobbies, this was the first time we had a private meeting.

He asked me,

"Manager Yoon Young-cheol told me that there are several suspicions regarding the Premus fund?"

"Yes. The content of the report I submitted is accurate. Not only that, but the fund's assets have tripled in just two years, yet nothing has changed. It's also unusual that it consistently generates steady returns regardless of market volatility."

Executive Vice President Yang Jeong-wook listened to me seriously.

"Then what do you suggest we do?"

"To calm investors' concerns, Premus should disclose the fund's data and clarify the suspicions. We also need to verify whether the submitted materials match the actual assets held."

He nodded in agreement.

"Actually, the company is already conducting an investigation into this matter."

I was taken aback.

"Really?"

"Leaking information about an ongoing investigation could cause significant problems. There might be noise during the investigation, and they might try to cover up. Do you understand?"

"Yes, I understand."

Thinking about it, it made sense.

If I, a regular employee, had noticed the problem, the higher-ups must have been aware of it long before.

I almost got into trouble by getting involved in an ongoing investigation.

Executive Vice President Yang Jeong-wook patted my shoulder affectionately and said,

"There's a high possibility that there's no problem, so don't worry too much, Han Miru."

"Understood, Executive Vice President."

I believed him and waited for the investigation to conclude.

However, three months passed without any news, and Executive Vice President Yang Jeong-wook was suddenly promoted to vice chairman of DA Bank.

Two months later.

The Premus incident, recorded as the worst private fund fraud in South Korea, erupted.

It was later revealed that Executive Vice President Yang Jeong-wook had known for a long time that the Premus fund was investing in other areas.

He remained silent due to the substantial sales commissions.

Yang Jeong-wook believed in President Park Tae-il's capabilities and thought that any losses would be quickly recovered.

However, by the time he noticed the problem, it was already beyond the company's capacity to handle.

Instead of disclosing the issue, he continued to sell the fund and bought time to avoid responsibility.

During this period, he contacted politicians and influential figures to withdraw their money from the fund, and Yang Jeong-wook and some executives severed their ties with Premus and moved to DA Bank.

So, who was held responsible?

It was the remaining employees. The company, as if to show the public, imposed severe penalties on those involved.

Salary cuts, demotions, suspensions, and dismissals.

I, who had written dozens of recommendation reports, was also included. My reports pointing out the problems were never officially submitted, and it was recorded that Executive Vice President Yang Jeong-wook had not received any reports.

Although I and other employees had only followed orders, we couldn't say we were blameless. However, those in positions of responsibility who should have been held accountable had all escaped.

Compensation for the fund investors was not provided, and as a result, the tragedy occurred.

Many employees died or were injured. They received little compensation beyond fire insurance. Surviving employees lost their jobs as the company went bankrupt.

Executive Vice President Yang Jeong-wook neither apologized to the victims nor to the employees.

The employees who lost their jobs and the bereaved families of those who lost their lives staged protests in front of DA Bank's headquarters. I attended on behalf of my senior colleague, Dong Ho, who was receiving treatment in the hospital.

Despite the continuous requests from employees and bereaved families, he never met with us. Unable to bear it, I ran towards him as he emerged from the underground parking lot but was immediately restrained by security guards.

I shouted at him while being held down on the ground.

"It's your fault! What are you going to do about the people who lost all their assets and those who died? You should be held responsible!"

He stopped walking and looked at me as if nothing had happened.

"Why is it my responsibility?"

"What?"

"It's the responsibility of those who wrote incorrect reports and those who invested without proper due diligence. You should have done your research before writing, Han Miru."

"..."

He took out a few checks from his wallet and placed them in front of me, speaking affectionately.

"You look like you haven't showered in days. Go home, take a shower, and rest. Buy some good food. Nothing will change no matter how long you stay here."

I saw his face just before the car door closed. Behind his indifferent expression was a hidden smirk.

That was the last time I saw him in person.

* * *

"Long time no see. Have we met before?"

Executive Vice President Yang Jeong-wook's voice brought me back to reality.

To me, it feels like yesterday, but to him, it hasn't happened yet.

I replied casually,

"A few days ago, I greeted you in the lobby as you passed by."

Executive Vice President Yang Jeong-wook laughed as if amused.

"Is that so? If we don't see each other often, I should visit the cafeteria more frequently."

While eating, he asked the employees,

"Are there any problems or areas that need improvement in the company?"

The employees around him answered in unison.

"None at all."

"Everything is great."

"Our company is the best."

"Ha ha! If you find it hard to speak directly, you can post anonymously on the company bulletin board. If the company is a home, the employees are like family. The company will thrive if the employees are happy."

A smooth talker who abandoned his family and fled.

A hypocrite.

I managed my expression so as not to reveal my true feelings and raised my hand slightly.

Our department head, who was watching from the other table, shook his head as if to say, "Don't say anything unnecessary," but I ignored him and spoke.

"May I ask you a question, Executive Vice President?"

Executive Vice President Yang Jeong-wook looked interested.

"Of course. What is your question?"

"If the company's interests conflict with the customers' interests, what do you think is the right thing to do?"

"Hmm, that's a good question."

Executive Vice President Yang Jeong-wook spoke loudly for everyone to hear.

"The answer is simple. We must prioritize the customers' interests. A securities firm exists for the customers. We have the responsibility to protect the customers' assets and manage them with integrity. Even if it causes short-term harm to the company, doing so will ultimately benefit us in the long run."

The employees were impressed.

"That's a great statement."

"I will keep that in mind."

His answer was impeccable, even though he didn't act on it.

I nodded and smiled.

"Thank you, Executive Vice President."

* * *

Before returning to my seat,

I went out with Senior Dong Ho to buy coffee.

Dong Ho stirred the whipped cream and said,

"Do you know why the department head instructed you to write the report?"

"Because Executive Vice President Yang brought the Premus fund to DA Securities. Since the fund's sales count as his performance, the department head is taking care of it personally. If I write a good recommendation report, the executive vice president will be pleased."

Senior Dong Ho's eyes widened.

"What? How do you know so much? Who told you?"

From the first cycle, Senior Dong Ho.

Dong Ho had studied hard, believing that connections were crucial in the workplace. However, the company went bankrupt before he could establish any meaningful connections.

"I just picked it up from here and there."

Dong Ho cleared his throat and said,

"Anyway, the chairman will retire in a few years. Then, Executive Vice President Yang will take over."

"Right."

Chairman Yang Hyun-sung of DA Financial Group has one son and one daughter.

Korean conglomerates have a beautiful (or not) tradition of passing down the family business. It's natural for the chairman's son to become the next chairman.

"There's a rumor that Executive Vice President Yang came to the securities firm as part of his succession training. As you know, DA Financial Group is strong in banking, cards, and life insurance, but weak in securities. The group is supporting and boosting his performance in this area."

Even with a hereditary succession, shareholders wouldn't be happy if an incompetent person became chairman.

Therefore, the successor must demonstrate his management capabilities through performance.

"Anyway, it's a good opportunity for you. If you write a good report, the department head will be pleased. In the workplace, it's important not only to work hard but also to impress your superiors. In other words, you need to navigate the hierarchy well. Do you think you can write a good report?"

"I can write it without any problem."

Even in the first cycle, when I was clueless, I wrote a good report.

The department head was very satisfied and continued to assign me fund recommendation reports.

I wrote reports every quarter, unaware of the consequences.

"What do you think of the Premus fund? It generated a 6% return last year. Should I invest in it?"

"What about stocks?"

"I'm not going to do that anymore. I think stability is the best."

"..."

In reality, Senior Dong Ho did invest in the Premus fund. It's amazing how an analyst can step on so many landmines.

"Why are you looking at me like that?"

I sighed and said,

"I think it's better for you not to invest, Senior Dong Ho."

Dong Ho looked confused.

"Why? Why not?"