CH106 | VOC

Gold.

A metal that has held its value throughout human history.

From wedding rings to semiconductors, its uses are endless.

But its very usefulness has driven the gold trade underground.

“Even if it’s smuggled or stolen, its value remains.”

All countries impose taxes on gold transactions.

In Korea, it’s a 10% value-added tax (VAT).

Why is gold trading particularly shady, even though other goods also have VAT? Because it’s easy to launder.

Unlike other goods, which can be traced with serial numbers and trademarks, gold can be melted down and its origins erased.

For a company like Chunha Trading, which dealt with gold wholesale, laundering was a piece of cake.

“Thanks to the gold collection campaign, we can get a VAT refund on gold exports. We could import it through our Chinese subsidiary or other branches, process it, and then re-import it to Korea for a profit.”

I grimaced. “Why are they refusing?”

I had offered to buy gold from trading companies at a higher price than the current market rate, but they had all refused.

“Are they idiots? Why would they refuse a higher price?”

The more you processed gold, the more valuable it became.

Melted gold was worth more than gold rings, and gold bars were worth more than melted gold.

And if you could get international certification, it was even better.

But these foolish trading companies were selling the gold collected from the public as is, being taken advantage of in the international gold market.

Of course, I understood their reasoning.

They hadn’t worked hard for the gold. The public, blinded by the media’s propaganda, was selling it to them at incredibly low prices. They could make a profit just by reselling it without any processing.

But it still didn’t make sense to refuse a higher price.

“We’re offering to refine and sell their gold for them, and they’re refusing? It would be profitable for them.”

Maru tilted his head. “I don’t understand either. Selling at the highest price is basic business sense.”

“Why are they choosing to be suckers when we’re offering them a way out?”

Park Jong-bum said thoughtfully,

“Maybe there’s another reason we don’t know about.”

“Another reason?”

“It’s just speculation. There’s no other logical explanation. Should we investigate?”

I nodded. “Yes, investigate the Myeongdong gold market. Find out why they’re doing this.”

* * *

“Greetings, Mr. Cho. It’s been a while.”

Park Jong-bum greeted Mr. Cho, a wholesaler in the Myeongdong gold market and a regular client who helped Chunha Trading launder money.

“Director Park, it’s been a while.”

They sat down on the sofa.

“How have you been?”

Mr. Cho said with a sullen expression,

“I’ve been well, except for the slow business.”

“Are there fewer transactions these days?”

“You know the situation. The gold price is fluctuating, and that damn gold collection campaign has dried up the market.”

“Haha.”

Mr. Cho’s eyes gleamed. “Do you have another job for me?”

Park Jong-bum smiled at his eagerness to launder money. “I’m sorry to disappoint you, but not at the moment.”

Mr. Cho waved his hands. “Don’t apologize! It’s an honor to have a regular client like Chunha Trading in these times.”

“Haha. It must be tough with the gold collection campaign.”

Mr. Cho gritted his teeth.

“Of course it is! 100 tons! 100 tons of gold have left the country in just one month! The entire Myeongdong gold market is suffering because of that stupid campaign.”

Park Jong-bum said, seeing his frustration,

“Speaking of which, those trading companies are being taken advantage of, aren’t they? They’re practically giving away the gold.”

Mr. Cho nodded vigorously.

“That’s exactly what I’m saying! They’re acting like amateurs! How can they sell at such low prices, even if they’re desperate for export sales and foreign currency?”

“That’s right. But I don’t understand why they’re doing this. They should know better. What’s their reason?”

“If I knew, I would have jumped in myself. There are many people eyeing the gold collection campaign.”

Park Jong-bum’s eyes widened. “Many people?”

“Of course! It’s free money! They could make hundreds of billions of won just by processing it.”

Park Jong-bum licked his lips.

‘So we weren’t the only ones thinking about this.’

It was a tempting opportunity for anyone in the gold business.

They could make a risk-free profit just by processing the gold and even contribute to the national economy.

A win-win-win situation for the trading companies, the gold dealers, and the country.

“Has anyone succeeded?”

Mr. Cho shook his head. “They were all rejected. The trading companies said they would handle it themselves.”

“Really?”

“They wouldn’t listen, no matter how much we tried to persuade them. Someone even sent them a detailed proposal with profit calculations, but it didn’t work.”

“I see.”

“Everyone has given up. They think the trading companies are idiots.”

“Are there any other rumors?”

“No, nothing in particular…”

Park Jong-bum, realizing there was nothing more to learn, said,

“I see. We were also thinking of getting involved, but it seems many others have already tried and failed.”

Mr. Cho was surprised. “Even Chunha Trading?”

“Haha, that’s why I’m here today. I was wondering if you knew anything.”

“Ah, I see.”

“Anyway, thanks for the information. I need to report back to my CEO.”

As Park Jong-bum stood up to leave, Mr. Cho fidgeted nervously.

He had to provide the best service to his best clients.

He couldn’t let a VIP like Chunha Trading’s director leave empty-handed.

He racked his brain and then said hesitantly,

“This is a bit unrelated, but…”

“What is it?”

“There’s something strange going on.”

“Any rumor is welcome.”

Mr. Cho scratched the back of his head.

“Those trading companies… I heard their gold imports have increased significantly.”

“What do you mean?”

“Gold imports plummeted after the IMF crisis, but they’ve been increasing rapidly since the gold collection campaign started.”

Park Jong-bum looked puzzled.

“Does that make sense? The demand for gold, industrial or otherwise, is decreasing. Why would imports increase?”

“We don’t understand either. And the gold isn’t being released into the market.”

* * *

“Increased imports? That’s strange.”

Park Jong-bum nodded.

“I could understand them buying back the gold they sold to improve their export figures and earn foreign currency, but increasing imports doesn’t make sense.”

“Exactly. It’s a guaranteed loss. They must be insane.”

Maru also shook his head.

“I can’t understand it either.”

What was the purpose of business?

To buy low and sell high, making a profit.

But the trading companies’ behavior defied this basic principle.

They were buying high and selling low.

They were buying the gold collected from the public at 70% of the international market price, selling it overseas at 90%, and then buying it back at 100%.

They made a 20% profit by exploiting the public and then lost 10% by buying it back.

It was somewhat understandable if they were doing it to improve their export figures and earn foreign currency. But increasing imports?

It was a guaranteed loss, something no sane business would do.

“There’s something going on. They’re up to something.”

Park Jong-bum nodded.

“Increasing imports means they have a plan. There must be a reason for them to engage in such an unprofitable activity.”

I thought hard.

“We’re missing something. What is it? How are they profiting from this?”

Maru said,

“Maybe they’re colluding with foreign companies? Buying high and receiving kickbacks to create slush funds is a common tactic.”

“That’s possible. But the scale is too large for that…”

Let’s think this through again.

The public collects gold and sells it to trading companies, who then sell it to overseas buyers.

Profit so far.

Then they buy back the same gold at a higher price.

Loss.

A thought suddenly struck me.

“Wait, did they say how much the imports have increased?”

“I don’t think so…”

I said with a serious expression,

“Find out. How much has the gold import volume increased?”

Individual company transactions were confidential, but the national import figures were publicly available.

I looked at the numbers and said with a hollow voice,

“What the hell are they doing?”

Maru waved his hands.

“I give up. This makes even less sense after the calculations.”

The gold import volume had increased by over 100 tons in just one month.

Korea’s annual gold imports were only about 200 tons, so a 100-ton increase in a single month was absurd.

And the 100-ton figure itself was strange.

“It’s exactly the same as the 100 tons collected through the gold collection campaign.”

The statistics showed that Korea had exported 100 tons of gold collected from the public and then imported 100 tons. There was only one explanation.

“Did they buy back the same gold they sold?”

Park Jong-bum shook his head in disbelief.

“That’s the ultimate sucker move.”

“It doesn’t make sense. They sold it cheap and then bought it back at a higher price? Even a five-year-old wouldn’t do that.”

I could understand if they had just sold it cheaply and moved on. But buying back the same gold at a higher price?

There had to be a reason.

I tapped my finger on the table rhythmically, lost in thought.

‘This is strange. They must be profiting somehow, but I can’t see how. It’s not about the price fluctuation, the gold price isn’t right for that, and they’re not refining it, so there’s no additional profit.’

They were selling it without refining it and then buying it back.

“Maybe it’s not about the gold itself, but about the transaction itself?”

“What do you mean? Isn’t it the same thing?”

I shook my head at Maru’s question.

“No, it’s different. You buy something to make a profit. But they’re not buying it for the gold, they’re buying it for the transaction itself. They don’t have time to refine it. Hmm.”

I combined the absurd situation with my years of experience in illegal activities.

“This is definitely not a legitimate transaction. It reeks of illegality. What is it? It’s not about the gold, it’s about…”

I slammed my hand on the table.

“I’ve got it!”

“Did you figure something out?” Park Jong-bum asked in surprise.

I said with a shocked expression,

“They’re playing hot potato with the money!”