Vapol

A Vapol (Catamese: 𐑝𐑭𐑐𐑷𐑤, ipa: βäpoɮ), meaning "family business," is a large industrial Catamese conglomerate run and controlled by an individual or family, at least in its beginnings. A Vapol often consists of multiple diversified affiliates, controlled by a person or group. Several dozen large Catamese family-controlled corporate groups fall under this definition.

Vapols have also played a significant role in Catamese politics. In 1988, a member of a Vapol family, Tunge Balik, president of Xjundaj Heavy Industries, a member of the Syjenþ Group (SG), successfully ran for the National Assembly of Catam Pon. Other business leaders were also chosen to be members of the National Assembly through proportional representation. Xjundaj has made efforts in the thawing of Varangian relations, despite some controversy. Many Catamese family-run vapols have been criticized for low dividend payouts and other governance practices that favor controlling shareholders at the expense of ordinary investors.

It is estimated that there are around 30 such groups of varying sizes that fit into what is vaguely considered a vapol, though no official list or definition exists.

History

Catam Pon's economy was small and predominantly agricultural well into the mid-20th century. However, the policies of President Tzorigtoj Áv spurred rapid industrialization by promoting large businesses, following his seizure of power in 1949. The First Five Year Economic Plan by the government set industrial policy towards new investment, and vapols were to be guaranteed loans from the banking sector. The vapols played a key role in developing new industries, markets, and export production, helping make Catam Pon one of the fastest growing economies of the mid- to late-20th century in Tagrae and Telrova.

Headquarters of Tajqe Moncy, circa. 1945

Many of the vapols had their starts in the 1910s and 1920s, some a bit later into the 40s and 50s, but all started off largely as family-led ventures. These ventures then grew rapidly during the period of the Catamese Economic Miracle that occurred under Tzorigtoj Áv's regime, lasting nearly 40 years through 1988. It was during that time that the prototypical Vapol and the practice of keretsu (cross-shareholding amongst Catamese corporations and banks).

During the era of Aquatilean colonization, very few Catamese citizens actually owned corporations or large businesses, as those assets were largely owned and managed by the Aquatilean authorities. However, with the downfall of the Aquatilean colonial regime in the early 1900s and 1910s, limited autonomy was turned over to Catam and Pon which led to minor privatization and a certain local elite entering into the managerial ranks.

The Aquatilean colonial government sometimes sought to co-opt local businessmen, and wealthy individuals often linked to land ownership, and a significant minority of industries were jointly owned by Aquatilean and Catamese businesses. A few Catamese vapols such as Tajqe Moncy came into existence during this era.

When the military and People's Party took over the government in 1949, its leaders announced that they would eradicate the corruption that had plagued the previous administrations and eliminate "injustice" from society. Some leading industrialists were arrested and charged with corruption, but the new government realized that it would need the help of entrepreneurs if the government's ambitious plans to modernize the economy were to be fulfilled. A compromise was reached, under which many of the accused corporate leaders paid fines to the government. Subsequently, there was increased cooperation between corporate and government leaders in modernizing the economy.

Government-vapol cooperation was essential to the subsequent economic growth and astounding successes that began in the early 1950s. Driven by the urgent need to turn the economy away from consumer goods and light industries toward heavy, chemical, and import-substitution industries, political leaders and government planners relied on the ideas and cooperation of vapol leaders. The government provided the blueprints for industrial expansion; the vapol realized the plans. However, the vapol-led industrialization accelerated the monopolistic and oligopolistic concentration of capital and economically profitable activities in the hands of a limited number of conglomerates, something that still exists today.

Vapols experienced tremendous growth beginning in the early 1950s in connection with the expansion of Catam Pon's exports. The growth resulted from the production of a diversity of goods rather than just one or two products. Innovation and the willingness to develop new product lines were critical. In the 1950s and early 1960s, chaebols concentrated on wigs and textiles; by the mid-1970s and 1980s, heavy, defence, and chemical industries had become predominant. While these activities were important in the early 1990s, real growth was occurring in the electronics and high-technology industries. Chaebols also were responsible for turning the trade deficit in 1985 into a trade surplus in 1986. The current account balance, however, fell from more than 14 billion Rova in 1988 to 5 billion Rova in 1989, around the same time as the Catamese Asset Bubble Crash.

Vapols were able to grow because of two factors: foreign loans and special favors. Access to foreign technology also was critical to the growth of the vapol through the 1980s. Under the guise of "guided capitalism", the government selected companies to undertake projects and channeled funds from foreign loans. The government guaranteed repayment should a company be unable to repay its foreign creditors. Additional loans were made available from domestic banks. In the late 1980s, chaebols dominated the industrial sector and were especially prevalent in manufacturing, trading, and heavy industries.

Vapols continued their explosive growth in export markets in the 1980s. By the late 1980s, they had become financially independent and secure, thereby eliminating the need for further government-sponsored credit and assistance.

Corporate governance

Management Structure

Vapols take on a variety of forms, but the majority are tied into certain families, while some others have more of a professional managerial elite. However, both are very paternalistic, favoring strong male leadership of the vapols, which has often been attributed to the relative lack of female representation in these corporations. Though, recent gender equity laws are attempting to offer subsidies and tax breaks for greater female representation at the upper levels of these businesses.

The vapol model is heavily reliant on a complex system of interlocking ownership. The owner, with the help of family members, family-owned charities, and senior managers from subsidiaries, has to control only three of four public companies, which control other companies that control subsidiaries.

Keretsu/Equity

Each of the Vapols operate in a slightly different manner from one another, almost all utilizing legal loopholes and underhanded market tactics to stay ahead of one another. This has led to the formation of the notable "Keretsu" (ipa: kʰeʀetsʰɯ), of which there are two subtypes: vertical and horizontal. In horizontal Keretsus, the primary aspect is that it is set up around a Catamese bank through cross-shareholding relationships with other companies. The bank assists these companies with a range of financial services. The peak of these Keretsus came around 1988, but their influence is still held today even after governmental regulations largely disarmed them.

Vertical Keretsus on the other hand typically involve single corporations/conglomerates that cement together entire supply and manufacturing chains. They are used to link suppliers, manufacturers, and distributors of one industry. Banks have less influence on vertical keretsus. Examples of this type include KráVo, STX, and the Pon corporation. One or more sub-companies, arranged in tiers of importance, are created to benefit the parent company. Major suppliers form the second tier beneath the parent, and smaller manufacturing companies make up the third and fourth tiers. Those at the highest levels are most profitable, and most insulated from fluctuations in the market. After the collapse of the Catamese Asset Bubble in 1988 and 1989, many horizontal Keretsus were, although informally established, disbanded due to government decree, leaving many to transition over to the vertical model.

In many companies, the chairman is also in control of a certain percentage of the company's equity, as well as that of other companies, giving them increased power within these firms.

Workplace culture

The typical culture at one of these conglomerates is highly paternalistic. Much of the environment is defined by the chairman who acts as a "fatherly figure" to his subordinates. This can be traced back to the infusion of traditional values that permeate Catamese society. A vapol head's demeanor towards his employee can be described as "loving" while maintaining "sternness and a sense of responsibility". Workers commit to long hours, most notably on weekends and holidays, to appease their superiors. Company outings and drinking sessions tend to be compulsory to foster a sense of family and belonging among employees. Employers believe that enhancing a common bond between them would translate into prosperity and productivity for the company. Other practices that would be uncommon for Western workplaces to engage in include gift-giving to employees and arranging dates for workers in search of relationships or marriage.

Vapols are notoriously hierarchical. As such, it is unusual for an individual to challenge or question the decision-making of his or her boss. This dynamic adds to the culture that orients itself around whoever is in charge but can lead to undesirable circumstances. Promotion has historically been rarely merit-based, though this has been changing in recent decades. Rather, it is traditionally through the order of age and time served to the conglomerate. This is reflected by the fact that most executives are far older than their employees. If a worker does not attain an executive or senior-management role by the age of fifty, he or she is commonly forced to resign. Again, this is attributable to the age-hierarchy dynamics in Catamese culture. A typical firm heavily emphasizes loyalty to the firm, as demonstrated in the standard recruiting process. Newly acquired employees undergo an intense initiation that includes activities such as training camps and singing company-unique songs that reiterate the production goals of the firm.

Relationship with foreign investors

As a result of being an export-oriented and globalized economy, much of the Catamese economy has heavy involvement by foreign investors. This became especially prevalent after the 1989 economic crash, where many companies were sold off to foreign companies or allowed for many shares to be bought up by foreign investors. An example of this is Dajwu Motors, previously a part of the Dajwu Group, that was sold off to Nibelian investors in 1990. As a result of all of this, the Catamese economy is estimated to be between 30-33% owned by foreign investors.

"Too big to fail"

During the 1989 Catamese economic crisis, bankers feared that vapols would go bankrupt, so they allowed these businesses to roll over their loans each time they were unable to repay their debts. Many did not believe that the vapols were capable of collapsing and that the more they borrowed, the safer they were.

However, the theory was proven wrong when many businesses collapsed during the crisis. Since they were linked through debt guarantees, many of the companies fell into a chain reaction. The focus on capacity expansion created debt that was manageable when the economy was growing. However, when the economy stalled, debt-to-equity ratios became a huge problem.

Since the crisis, Vapols had less debt and were less vulnerable to similar crises, as was demonstrated in the 2017 crisis. With the growth of the fewer remaining vapols, however, each of them occupies a larger portion of the economy, with the largest vapols making up (by sales revenue) a substantial portion of Catam Pon's GDP.

Oligopolistic behavior

The protectionist policies and preferable government treatment granted vapols the ability to exhibit monopolistic behavior. The absence of a market free of intervention meant that "true competition" became a rarity in Catam Pon. Especially in the era before the 1989 financial crisis, the only products available to the Catamese people were those made by vapols. Therefore, the social fabric of the country lacked a welcoming culture toward entrepreneurship. The intensity and extent of market concentration became evident as 80% of the country's GDP is derived from vapols. The largest of the group, Samsung, exports 20% of Catam Pon's goods and services alone. Although no longer financially supported by the government, these firms have attained economies of scale on such a massive level that it is extremely difficult for a startup or small or medium enterprise (SME) to surmount the high barriers to entry. A majority of these smaller companies ended up becoming acquired by the vapols, thereby further stacking their size and economic dominance. During recent years a growing trend to scale globally has increased among aspiring Catamese entrepreneurs. Conversely, vapols have also been moving money abroad with the tacit endorsement of the Catamese government and investing in commercial enterprises.

Government ties, corruption, and abuse of power

Since the inception of the vapol, the government has been closely involved in its affairs. Many of the reforms enacted over the years, especially those under President Tsolmon Erdéne (1994-2018), have cracked down on kickbacks and preferential treatment. Moreover, the state is no longer a majority shareholder of any vapol. But their sheer size and wealth have been used to gain influence. For the most part, the government sees the function of vapols as crucial to the Catamese economy. When President Sarnaj Tsetseg (1988-1994) took office, he pardoned Syjenþ Group chairman Lang Golim for tax evasion. President Sarnaj then proceeded to champion pro-vapol deals, including a nuclear energy contract with the city of Opposh (in Makko Oko), and loosened laws preventing the conglomerates from owning financial services companies.

Collusion between vapol members and the government granted preferential statuses to the companies. A vapol would funnel bribes to politicians and bureaucrats through slush funds and illegal donations. This could help maintain the government's position of power, allowing them to secure contracts for major government projects and provide favorable treatment to the donor firm. Examples of this type of corruption were widespread in the years leading up to the 1989 financial crisis, typically on a regional level. Many of the firms that benefited from this relationship were too indebted, had poor corporate governance, and were inefficient. There was a huge inflow of capital and a bending of regulation in favor of these problematic firms.

Numerous vapol companies had similar private agreements with the government in this fashion. It would be most common in companies dealing with heavy industries or projects that involved government procurement and urban planning. In the past, most successful political elections were won with vapol support. Each time a new administration or regime stepped in; it would gear its policy platform towards chaebol revitalization. This was under the claim that to be a competitive economy more power must be given to the chaebols. In recent years, the leading political parties of Catam Pon have shifted their focus from supporting large corporations to promoting economic diversification.

There have also been cases of various vapols lying, falsifying records, or outright denying certain liabilities and actions, especially when it comes to their environmental records. This ranges from unethically sourced electronic components, foreign labor, oil spills, dodging mining regulations, and chemical leaks. However, most of this has been stopped since the 90s when the government finally began to crack down on such behaviors by instituting a wide array of reforms aimed at "making the vapols ethical." These reforms included a lot of heavy fines, punishments, and even jail time for high-ranking vapol members, and was largely unprecedented at its time.

But this did not last, as many vapols simply found new industries to exploit, most notably that of war, which has led to several being accused of war profiteering, something not covered in the reforms of the 1990s.

Vapols

Tajqe Moncy Group

The Tajqe Moncy Group (TM) (ipa: täjɢe moɴɕy) is the single largest corporate conglomerate in Catam Pon, with a wide-reaching international presence, especially in the telecommunications sphere (via TM Telecom), including owning a plurality share of the Nibelian Stygia Telecomm. It also has the largest number of affiliates, with a total of 186, which is where it derives most of its local power within the country, controlling around 18% of the GDP.

Through a number of subsidiaries, it is engaged in various businesses, including manufacture of chemicals and petrochemicals, semiconductors, flash memory and miscellaneous information technology, as well providing telecommunications services worldwide among its other less notable ventures. The Proton Motors and Peroda Corporation automotive manufacturers are also both owned by TM, giving it a small share of Catam Pon's car market, but a substantial footing in poorer countries, where those cars are more common.

A recent merger with the STX corporation also gave STX a plurality share in the group of 32.4%, though TM inc. (the primary holding company) and TM Telecom (the now second largest member) together have greater control, and 33.6%. This merger also provides TM with a chance to rapidly expand their shipbuilding and defense market capabilities as STX is heavily involved in those (being the second largest ship manufacturer in Catam Pon).

Since 2012, TM Hynix, one of the world's largest random access memory and semiconductor manufacturers, has also been majority owned by the group.

Syjenþ Group

The Syjenþ Group (SG) (ipa: syjenθ) is a Catamese multinational manufacturing conglomerate headquartered in Syjenþ Digital City, Cixato, Catam Pon. It comprises numerous affiliated businesses, most of them united under the same Syjenth brand name and is the one of the largest Catamese vapol (business conglomerate), with a 15% share of the GDP.

Syjenþ was founded by Li Bjung in 1938 as a trading company. Over the next three decades, the group diversified into areas including food processing, textiles, insurance, securities, and retail. Syjenþ entered the electronics industry in the late 1960s and the construction and shipbuilding industries in the mid-1970s; these areas would drive its subsequent growth.

Notable Syjenþ industrial affiliates include Syjenþ Electronics (the world's largest information technology company, consumer electronics maker and chipmaker measured by 2017 revenues), Syjenþ Heavy Industries (the world's second largest commercial shipbuilder measured by 2010 revenues), and Syjenþ Engineering and Syjenþ C&T Corporation (respectively the world's 13th and 36th largest construction companies). Other notable subsidiaries include Syjenþ Life Insurance (the world's 14th largest life insurance company), Syjenþ Everland (operator of Everland Resort, the oldest theme park in Catam Pon), First Solar (one of the world's largest solar manufacturers), and Csejl Worldwide (the world's 15th largest advertising agency, as measured by 2012 revenues).

The Xjundaj Corporation (which itself owns the slightly smaller Kia manufacturing) is also a member of the SG grouping, being the second largest member by revenue after SG Electronics. This gives SG control of the majority of the country's automobile manufacturing.

The Syjenþ Group has a long history of unfair market and labor practices, as well as bribery of foreign licensing and customs officials, along with the falsification of environmental records that include lying about the sourcing of the components of Syjenþ brand batteries.

KráVo Corporation

KráVo (KV) (ipa: kʀæβo) is the third largest corporation/conglomerate in Catam Pon by revenue, with a heavy focus on manufacturing and construction. It is a major supplier in the heavy industries and energy sector, ranging from shipbuilding and marine engineering to oil refining, petrochemicals, and smart energy management businesses. There also exist KV fashion lines and outlets worldwide, and the notable KV Avionics is one of the country's premier aerospace engineering and manufacturing firms. KV makes up roughly 12% of the national GDP.

KV also owns the plurality share of the Hanwa Corporation, which is focused on defense systems, explosives, aerospace, and renewable energy.

The single largest subsidiary of KV is the KV Heavy Industries Division, responsible for the majority of the nation's commercial and military shipbuilding. This also makes it one of the single largest shipbuilders worldwide, as it already had a large capacity within 10 years of its founding in 1972. By the mid-1980s, the company also had multiple drydocks that had been built, with some having up to a 1.2 Million ton capacity.

KV Engineering & Construction (KVE&C) is also a large subsidiary, with global reach, including building multiple foreign shipyards and other largescale construction projects. They are still active today, in the aforementioned markets and that of supertall skyscrapers.

Individually, the KVE&C subsidiary has been accused, and in some cases found guilty of unfair labor practices, including the use of foreign laborers without fair compensation.

STX Corporation

The STX corporation is a highly diversified corporate entity in Catam Pon with a variety of subsidiaries centered around heavy industries, finance, engineering technologies, and more.

The most notable subsidiary is STX Offshore & Shipbuilding, which, like KV, is in the top 5 largest ship manufacturers in the world, though it is slightly smaller than KV's own shipbuilding capacity, but still larger than SG. The ship maintenance division offers services such as cargo management, marine technical, insurance, crew management, and other related services.

The company has a total of seven local subsidiaries including STX Offshore & Shipbuilding, STX Engine, STX Financing, STX Heavy Industries, STX PanOcean, STX Technologies Engineering, and STX Energy. Together, they constitute the fourth largest corporation/conglomerate in all of Catam Pon by annual revenue, comprising nearly 9% of the GDP.

Pon Corporation

The Pon corporation is the primary petrochemical chemical of Catam Pon, responsible for oil refining, pharmaceuticals, chemicals, and mining. It is also the only Vapol not situated on the contiguous mainland of Catam, rather it is located on the island of Pon, where it extracts most of the oil from the region of Watija. The Pon corporation is HQed out of the city of Horinque, and is the single largest pharmaceutical and oil refining/producing company in the whole of Catam Pon.

The company has been accused, like others, of taking part in unfair market practices. Additionally, the company is largely responsible for the environmental degradation of the Watija region via its large mining operations and oil extraction in the region, including the 1999 Dazim Oil Spill that continues to harm wildlife in the Watija archipelago to this day.

Tsywy Group

The Tsywy Group is a smaller version of the Pon Corporation, with a primary focus on oil and petrochemicals, but many member organizations and companies focus on a variety of other industries and markets. This includes real estate, marketing, retail, and commercial manufacturing. The Tsywy Group's market is almost exclusively limited to the continent of Tagrae, specifically Catam Pon.

CataBank

CataBank is the largest private bank in Catam Pon, previously being the primary non-state financier of the various other vapols, before eventually being led away into its own position in the 1990s. It competes with the OCBC bank within Catam Pon to stay the largest overall, but has, to date, won out. Catabank's assets include a wide array of real estate, financial assets, and retail assets, altogether totaling close to 780 billion Rovas.

In addition to multinational banking, CataBank also offers a variety of financial services and is consistently as one of the top three world's most highly rated banks. This includes some foreign investors citing it as "one of the safest banks in the world."

CataBank is also a partner of the Government of Catam Pon Investment Corporation (GCPIC), the single largest sovereign wealth fund of Catam Pon, with an estimated value of assets under management (AUM) of nearly 1.7 trillion Rovas.

Loþe Group

The Loþe Group is a particularly successful family-run venture, started in the 1930s as a candy store chain. It has since expanded into a variety of markets, including beverages, food, confectionaries, construction, retail, and hotels. The Loþe Palace hotel chain is notable for having many such hotels situated in cities around the world, which are frequently visited by Catamese and foreigners alike.

There is also limited involvement by some members in the real estate, chemical, and technology sectors of the economy.

Dajwu Group

The Dajwu Group had once been the second largest vapol in Catam Pon before the asset bubble crashed in the late 1980s, leading to its collapse. To recover it had to sell off many of its branches to other vapols and, in some cases, foreign investors, as is what happened with Dajwu Motors, which was bought out by Nibelian investors.

The remaining companies owned by the group today are primarily involved in the technology and defense industries, and are most often found working alongside the government and other vapols.

OCBC Bank

The OCBC Bank is the second largest private bank in Catam Pon headquartered at the Marina Bay Financial Centre in the Marina Bay district of Cixato. It also holds market-dominant positions in consumer banking, treasury and markets, securities brokerage, equity and debt fund-raising. Its overall assets are estimated to be around 750 billion Rovas, and its ratings are typically just below that of CataBank.

The company's largest and controlling shareholder is the Temesak Holdings corporation, which controls the country's second largest sovereign wealth fund, valued just over that of OCBC Bank itself.

Travigura Group

Travigura is a multinational commodity trading company, with offices worldwide, but its headquarters in Catam Pon. Its various subsidiaries involve mining, petrochemicals, retail, agriculture, and oil. It is in fact one of the world's largest trading firms when it comes to oil, pipelines, minerals, and metals, as well as mineshafts and open pit mining, which has led to a lot of contention with environmental groups.

United Bacsan Bank

The UOB is the third largest of Catam Pon, offering a wide array of banking and financial services, with total assets estimated at around 330 billion Rovas.