Government Accept 34 Deregulation Measure

The government made a final decision not to apply the equity investment limit until March 2003, in case that the companies may need to invest their money necessary for accelerating the restructuring. And the government extends the grace period for removing the excessive amount of investment, from 1 year to 2 years.

Ministry of Finance and Economy (MFE), Korea Fair Trade Commission, and the Financial Supervisory Commission announced yesterday the deregulation measures as well as complementary measures through the practical reviews and the consultations with the ruling party on 72 demands from the business sector.

Easing the regulative policy, the government will investigate via Korea Stock Exchange whether all listed companies are improving the corporate governance. And it will introduce gradually the class action lawsuit system by shareholders. And it will inspect how well the pension corporations, and the investment & trust companies are supervising the management of large groups.

Kwon Oh-Kyu, an assistant secretary of MFE told that ``The government has reviewed the business sector`s demands by dividing into four categories such as fair trade, finance, tax system, and labor. Through the review, the government decided to loosen 34 items necessary for escalating the exports and the investments within the major corporate reform principles.``

But the government will review, as the mid and long-term tasks, 8 items such as the introduction of the connected tax payment system and the exemption of the obligation to take over the employees during the `restructuring`. And it did not accept 30 items such as the establishment of the wage guideline.

In addition to the extension of the grace period for exceptions to the equity investment limit, the government will not include in the investment regulation the Chaebols` selling off the non-core subsidiaries to invest to the new business.

Jin Nyum, the Deputy Prime Minister and the Minister of Finance and Economy, told that ``The government made a concession with the ruling party to execute the class action lawsuit system from next year after revising the related laws in the National Assembly on September. Although the business would not accept the introduction of this system, the government will execute the system from next year.``

Choi Young-Hae moneychoi@donga.com