U.S. senators claim aid to HEI is illegal

Some United States senators have said Korea Development Bank`s (KDB) speedy rollover of Hyundai Electronics Industries (HEI)¡¯ corporate bonds is illegal and submitted a resolution requiring corrective measures by the Korean and U.S. governments.

The move is expected to increase U.S. trade pressure on Korea, although the Korean government strongly maintains that the measure was taken to complement Korea¡¯s money market.

On Feb. 13, U.S. senator Larry Craig, in cooperation with Senate Republican floor leader Trent Lott, submitted a joint resolution to the U.S. Congress alleging that the KDB¡¯s speedy rollover of HEl¡¯s corporate bonds was a violation of the IMF loan agreement, WTO rules and Article 301 of the American tariff and trade law.

The Joint resolution also claimed that the measure had injured Korea-U.S. relations and argued that the ¡°Korean government should stop KDB¡¯s acceptance of corporate bonds, abide by the International Monetary Fund (IMF) agreement and World Trade Organization (WTO) rules, and that the U.S. government should take necessary steps to offset or reverse the Korean government¡¯s measures and report them to Congress.¡±

The Ministry of Finance and Economy countered that, ¡°The Korean government¡¯ action was not against the IMF agreement, WTO rules or American laws but was necessary to complement the money market.¡±