Rival Parties Legislate Corporate Restructuring Acceleration Law

The government, and the ruling and opposition parties, have agreed to legislate a law for accelerating corporate restructuring in a National Assembly special session in June. This law aims at constant corporate restructuring led mainly by the creditor financial institutions.

The three sides also agreed to reduce the support of public fund, and establish or revise three budget-related laws such as a law on fiscal soundness.

The agreements were made in the policy forum held over the weekend in Chonan. Participants in the forum included twelve economic experts of two rival parties including New Millennium Democratic Party (MDP) Chairman of Policy and Coordination Committee Kang Un-Tae, Grand National Party(GNP) Chairman of Policy Committee Kim Man-Je, and five economic ministers including Jin Nyum Deputy Prime Minister and Minister of Finance and Economy.

According to the joint statement released after the forum yesterday, the government and the two rival parties agreed on six major economic policy issues such as corporate restructuring, financial institution restructuring and recovery of public funds, stabilization of common people and resolution of regional unbalance, national overall debt, improvement of business environment, and national competitiveness edge.

Participants also agreed to settle the problematic companies that have been stumbling blocks to the building of national credibility, under the creditors` responsibility through the transparent procedure.

Based on a consensus to normalize the construction industry in order to expand the demand of local construction and to support the low cost housing, three parties agreed to establish general measures for revitalization of construction industry.

They drew an agreement on the necessity of rapid recovery of fiscal soundness. Thus, three budget reform laws such as fiscal soundness law, budget accounting law, and fund management law, are to be legislated or revised to support the government`s efforts for fiscal soundness.

The statement also read that three sides decided to make collaborative efforts to nurture the stock market through long-term stock investment and shareholder-centered corporate management, etc.. That is, they agreed that the revival of stock market is necessary in order to maximize the potential of our economy.

According to the statement, the government`s provision of public funds to corporate restructuring will be curbed, and the collection rate of public funds will be increased.

Meanwhile, the government announced, that if another insolvency problem occurs among Hyundai subsidiaries, they will be treated under the most strict market principle, unlike Hyundai Engineering and Construction (HDEC) case. An participant of the Grand National Party told that ``the government emphasized that other Hyundai subsidiaries will not be treated in the same way as HDEC.`` This suggested that if there occurs insolvency among these companies, they will be under the court receivership.``

Kwon Soon-Hwal shkwon@donga.com