President Kim urges strong reform drive

In addition to the firms under workout programs, creditor bank-led corporate restructuring is to be implemented on a large scale for companies ranking the 30th to 60th in terms of assets. Creditor banks also will conduct a comprehensive review over possible moral hazard of 44 workout firms, leading nonviable firms to be liquidated by the end of November.

According to Chong Wa Dae spokesman Park Joon-Young, President Kim Dae-Jung indicated, ¡°The push for workout plans is said to be somewhat loose.¡± And he ordered the authorities concerned to round off the workout arrangements within this year by all means.¡±

In particular, President Kim noted, ¡°Creditor banks are apt to turn a blind eye to workout firms under their management.¡± He also added, ¡°Ailing firms are reluctant to dispose of their affiliates, which become a stumbling block to the industrial specialization.¡±

Consequently, the Financial Supervisory Commission decided upon to scoop 32 firms out of 76 from workout programs by end of August, and re-examine the viability of the remaining 44 workout firms, drawing a final decision within this year-end. Also, completing an inspection over workout firms by July 25, the FSC will frame plans to change the management of firms with moral hazard, and ask civil and penal responsibilities against their illegal activities.

In addition, granting the competence of surveillance over insolvent firms to such financial supervisory bodies as the FSC is under consideration for efficient workout implementation.

Prior to this day¡¯s announcement, in an exclusive interview with Dong-A Ilbo on July 13, the FSC¡¯s Chairman Lee Yong-Keun revealed the government plan for a strong reform drive in this year¡¯s second half, saying ¡°A complete preclusion of bankrupt corporations is the key to prevent insolvencies in the financial sector.¡±