Story of a Big Player from Gangnam

Gun-Ho said to the deputy mayor, “Since we signed the letter of intent, let’s conclude the actual contract within two months.”

“We will issue you the license to run the bus service right away once you bring in the initial investment funds; you don’t have to wait for two months. Since the road between Antang City and Guiyang City is paved now, the community is requesting to start the passenger transportation service with luxurious buses.”

“Hmm.”

“Why don’t you send the person who would take the president position of the joint venture company to China first? So, he could begin to run the business as soon as possible. We can sign the actual contract then.”

“Okay. I will send the joint venture’s president to China along with the first portion of the investment funds. Once the joint venture is established, the parcel of land must be transferred to the joint venture as well.”

“Well, umm… sure.”

Gun-Ho came back to Korea from the trip to China. When he arrived at Incheon International Airport, Chan-Ho Eum was waiting for him. On the way home in the car, Gun-Ho asked Jae-Sik Moon, “They will at first set up your office in the terminal. Since you will oversee the terminal business and the passenger transportation business, they will arrange your office close to the business site.”

“I feel nervous about going there to work, but I do like the city.”

“You do?”

“It is a good-sized city, not too big or too busy, and not too small either. It’s not the country, but it is still a city. I’ve seen nice luxurious condo complexes in Antang City earlier. I think living there can be convenient.”

“Oh, that’s right. You went to the traditional market there too, right?”

“Yeah. They have everything like all sorts of vegetables including radish, cabbage, peppers, bean sprouts, and tofu. Oh, tofu and rice look exactly the same as those in Korea.”

“They have a supermarket as well. You should be fine.”

Gun-Ho received a call from Min-Hyeok Kim.

“You didn’t stop by my place before returning to Korea, huh?”

“Yeah, I couldn’t make the time.”

“When you move to China, don’t go with your wife right away.”

“Why not?”

“You’d better spend some time there by yourself to settle first. It might take around three months, and you can then ask her to move to China.”

“Yeah, I thought about it too.”

Jae-Sik Moon was staring outside the window when Gun-Ho talked to him again.

“The joint venture is between GH Logistics and Antang City’s transportation company. Once you return to work in GH Logistics, collect the business license and a certified copy of business registration.”

“Okay.”

“Also, get the notarized translated versions of those documents into English.”

“You want to give those papers to the Chinese party?”

“Yeah. They will probably ask us to show them the financial statements as well, but since GH Logistics is a newly formed company, we don’t have them, so we don’t have to show them. They seem to recognize our company as GH companies with several business entities, so I don’t think they would insist on getting GH Logistics’ financial statements specifically.”

“What if they still insist?”

“Don’t worry about it. We have better bargaining power than them. They are the one who desperately wants us to join them for the project. If they unreasonably keep on requesting the financial statements, we can just tell them that we wouldn’t participate in the project at all.”

“Considering the size of the city, I guess they could find local investors to build the terminal. I wonder why they want a foreign investor and form a joint venture. Why do they choose a more complicated way to reach their goal?”

“If they use the city budget to build the terminal—they can since it’s for the public benefit—it will take a few years to launch the project. If they let the local investors participate in the project, those people will intervene in managing the project, and it will eventually create some conflicts. The local investors will fight over who’s going to take the best commercial store in the terminal.”

“That sounds very possible.”

“If they use foreign investment funds to build the terminal, it will be quick without touching their city budget. In addition, their work will be highly evaluated as they successfully improve the citizens’ daily life. Subsequently, the deputy mayor will be praised for the work, and he will have an opportunity to be promoted and relocated to a bigger city than Antang City, maybe after two or three years.”

“Man, you are very knowledgeable about everything. I learn a lot from you.”

“Nah, it’s just how things work in general.”

“Jae-Sik, once you go back to work in GH Logistics, just focus on converting the land use of the farmland. It’s a very important thing for us for now. I will send the 400 million won to your bank account for the conversion fees.”

“Hmm, okay.”

“After paying the taxes and relevant fees and completing the land use conversion, GH Logistics will buy the land from you.”

“We just need to make papers for the transfer, right?”

“When we bought those parcels of farmland, we spent 900 million won for the 1,500 pyung large land, and another 1 billion won for the 2,600 pyung large landlocked property, didn’t we?”

“Yeah, we did.”

“Then, we spent 1.9 billion won in total. We will then spend another 400 million won for taxes and fees in converting the land use. So, we would end up paying, in total, 2.3 billion won for the land.”

“That’s correct.”

“On top of that, we paid the agency and stuff. Let’s assume it cost us 2.4 billion then.”

“Right.”

“Then you sell the land to GH Logistics for 3 billion won.”

“Hmm, does it make GH Logistics increase its capital?”

“Not necessarily.”