Story of a Big Player from Gangnam - Chapter 695
Chapter 695: GH Food Co., Ltd. (2) – Part 2
Accounting Director Min-Hwa Kim answered the phone.
“This is Min-Hwa Kim.”
“It’s me.”
“Oh, sir.”
“We have received the 3 billion won from Dyeon Korea for our investment in-kind, haven’t we?”
“Yes, we have, sir. As you previously instructed, we are holding the fund right now.”
“We are buying a factory next door. When Director Choi from the general affairs department comes to you with a cash payment statement for it, get my signature and give him the fund.”
“Yes, sir.”
Gun-Ho received a call from Dyeon Korea’s internal auditor.
“We just had a visit from the investigators for the certificate of a startup company with technology.”
“Were we able to successfully respond to all of their questions and concerns?”
“They kept questioning whether a compounding know-how can be considered as a unique technology while shaking their heads. I made sure that they understood that our compounding technology has been independently developed under our roof, and even the U.S. and Japan don’t have this type of technology.”
“Hmm, really?”
“We told them that we are using raw materials that we bring from Lymondell Dyeon, but we use our unique technology to compound them. We used an analogy to convince them. We told them that even though there are tons of restaurants out there that offer food, there are clearly good restaurants that cook delicious food while there are those that provide mediocre dishes. If a compounding know-how is not considered as technology, why would chefs continue to research and develop their skills to make better food?”
“You got the point there.”
“They then asked if we could manufacture the exact same products with the raw materials produced by Korean companies such as Hyundai, Hanwah, Kumho, Kolong, etc.
“Did you say that we are, of course, able to do so?”
“Yes, sir. I told them we can absolutely do that. And I added that the only reason why we are using the raw materials produced by Lymondell Dyeon is because they are our partner in this joint venture and that they own 50% of the company.”
“Did they accept our reasoning?”
“They didn’t seem to buy it at first. Then we questioned them why the companies in China import our products if Lymondell Dyeon had a compounding technology like ours. They could simply open a joint venture with Lymondell Dyeon in China rather than buying our products. No one in their investigation group could answer that question. The fact that we are exporting our products to China and India worked as evidence supporting our claim that we have our own unique technology of compounding.”
“Haha, really? You did an excellent job. Well, when you receive the certificate, let me know right away.”
“Yes, sir, I will do that.”
Gun-Ho received a call from Jae-Sik Moon in China.
“President Goo? Is it a good time to talk?”
“Yeah. I just woke up from my usual nap. I’m good.”
“Haha, you did? I had dinner with the bank branch manager of the Industrial and Commercial Bank of China—Mr. Xiaodong Liu.”
“How did it go?”
“He said that us purchasing the condos in Huaxi Huayuan was the right decision from an investment point of view. All of the condos there are all sold now, and the price will start increasing soon since there is no condo available any longer. There is demand but no supply, and it’s natural that the price goes up under this setting.”
“Hmm.”
“When I asked him about the loan using the stores that we would lease, he said it would be very difficult to do so.”
“So, we can’t use the lease agreement to secure the loan?”
“We can’t include the interior, appliances, and equipment to collateral and secure the loan. But, we can take out a loan based on the amount that we would pay upfront to the owner. The thing is that it requires the owner’s consent.”
“Hmm, that’s complex.”
“I told him that the restaurants will be run by a business entity, and so does the loan. He said that we still need collateral to take out a loan. If we really need to borrow money, he said that he could let us take out more loans using our five condos in Huaxi Huayuan. He said that it could be done.”
“Hmm, I see.”
“If we form a new company and borrow money under the company’s name using the condos, he will do the paperwork indicating that the condos have been used for two separate loans, and also, he will need your Baozheng Fukuan (payment guarantee).”
“Does it mean that I have to come to Antang City?”
“Yes, you need to come here at least once to sign the paper in the bank.”
“That’s too complex and hassle. Let’s figure out something else.”
“What would that be?”
“If we form a company together, how much can you bring in?”
“I have 100 million won that I borrowed from the bank using the condo in East Incheon City. I can add 20 million won to it that Soon-Young’s mom saved while working at the book cafe. So, it would be 120 million won in total.”
“Hmm, I see. Didn’t you receive the deposit back when you moved out of the condo in Mangweon Town?”
“I did, but it was not much at all. I lived there by paying a monthly rent of 600,000 won with a 10 million won deposit. So, I got my 10 million won back when I moved out of it. When I bought the condo in East Incheon City, I borrowed a bit less than 100 million won, so I had to use some of the deposit in purchasing it. I used the rest of the deposit money when I moved here and bought furniture.”
“That’s why you have 120 million won in hand now, huh?”
“Yeah.”
“Let’s establish a company together. I will send you 480 million won. We can form a company with a 600 million won capital by adding your 120 million won to it. It will be a food company. As you mentioned before, the local government will easily let us open a company, so let’s do it. You will be able to take care of the articles of incorporation and the purpose of the company, right? Since you handled the formation of GH Logistics before.”
“Yeah. So, I will be owning 20% of the company?”
“Yeah. The capital will be 600 million won, and my contribution is 480 million won which is 80% of the total capital.”
“Can we do this?”
“Do what?”
“I actually made a promise to Soon-Young’s mom when we were thinking of opening a small deep-fried restaurant.”
“What promise?”
“I would come up with 100 million won, and my wife was supposed to come up with 20 million won to open the restaurant. And, my wife would operate the business, not me.”
“That’s right since you are busy with your work at the joint venture.”
“The joint venture has a company policy that doesn’t allow its executive officers to have a second job. Even if there is no such policy, I’m not supposed to do it. I can’t do that to the company. So, I promised my wife that even though she brought in only 20 million won, I would split the ownership of the business in half with her since she would be the one who would operate the restaurant on a daily basis.”
“Splitting the business ownership between a married couple? Is it necessary to make it official like that?”
“The thing is that she wants to help her family financially. She is the first child to her parents, and she strongly wants to support her parents. That’s why she asked me to give her 50% of the ownership of the restaurant, and she made sure that she would handle the daily operation by herself. She laughed when she made the suggestion as if it was a joke, but I know that’s what she really wanted.”
“Well, you will have 20% of the company. You can split it in half and share it with your wife. I will have 80%; you will have 10%, and she will have the other 10%. That’s what you are asking, right?”
“That’s exactly what I’m saying. Soon-Young’s mom will devote her time and energy to the business with pleasure.”
“I don’t mind at all. By the way, it seems that we will have to find a way to get an additional 100 million won since we will need 700 million won to start the business. Can you take out a loan of 100 million won from the bank with our upfront payment that would be shown on the lease agreement?”
“Okay, I will do that.”
Gun-Ho could have sent 100 million won that fell short of the initially required fund, but if he did that, Jae-Sik’s shares in the company would be reduced. So, he decided to let Jae-Sik borrow the amount of 100 million won from the bank.
