Gov¡¯t to complete corporate reforms this year

The government announced plans to complete the on-going reforms in the financial and corporate sectors within the year by forcing conglomerates with serious liquidity problems to close and injecting public funds into banks and merchant banks that are deemed unhealthy by October.

Moreover, the government will promote mega-mergers among banks to create a super bank that can become one of the top 50 in the world.

The Financial Supervisory Commission announced its blueprint for the second round of financial reform and revealed that viable insolvent companies, including conglomerates with liquidity problems, will be supported with sufficient funds while non-viable companies will be forcibly closed through debt to equity conversions, workouts, court receiverships and liquidations.

The government will also promote M&As among weak companies that lack competitiveness and companies with low profitability to transform them into high value adding companies, thus inducing self-promoted restructuring. The government has requested companies that are delaying big deals to come up with final proposals by the end of October.

12 workout Daewoo affiliates will be disposed of by the end of the year, and 34 workout companies will be inspected for viability by November to determine their fate.