Insolvent Financial Companies Immediately Expelled

The Insolvent financial companies whose debt exceed their assets or have no possibility for recovery, will be ousted immediately without customary procedures such as the management improvement or expostulations.

Financial Supervisory Commission (FSC) announced that ``in case when debt exceed the asset conspicuously and there is no possibility of execution of suitable time correction measure, the financial companies will be ousted by simultaneous implementation of suitable time correction measure and the command of management improvement.``

Previously FSC has ordered a `management improvement measure` which means to `expel` through suitable time correction measure and the evaluation of the plan for management improvement.

Director of Supervisory Policy of FSC, Lee Woo-Chul explained ``when suitable time correction measure is exercised during the stage when the net asset value is minus, insolvency expands and thus the burden of public fund increases for the restructuring of financial companies. Hence it is necessary to change a system in order to take prompt measures before the insolvency of financial companies enlarges.``

FSC created a new system that the listed financial companies should receive audition of accounts every quarter — previously it was once a year, and these financial companies are required to submit their files.

Lee Hoon dreamland@donga.com