Government, “Disposal of Cho Hung Bank Within the Month”

As the government formulated its policy to dispose of Cho Hung Bank within the month, Cho Hung Bank strongly repelled and so the side effects of the sales process will seem to be produced.

Jeon Yun-Cheol, the Deputy Premier and Minister of Finance & Economy said in ‘Sunday Diagnosis’ of KBS 1TV program, “As the public funds of 156 trillion won have been put since managed by IMF, there are a lot of nationalized companies. As one of them, we will sell off Cho Hung Bank within November.”

The government selected 4 bidders such as Shinhan Finance Group among 15 bidders participated in the disposal of Cho Hung Bank at the end of last month. They have been currently executing a due diligence for Cho Hung Bank.

The government will hold the Public Fund Oversight Committee at the end of the month immediately after finishing the due diligence of four institutions. Then, it will select the final bidder.

Accordingly, the management and labor union of Cho Hung Bank repelled, “The government is in great hurry for the disposal of Cho Hung Bank.”

The labor union of Cho Hung Bank held an emergency board of representatives and determined a general strike on November 1. The labor union started a protest demonstration in front of a building of Financial Supervisory Service (FSS), youido Seoul in the afternoon of the day and struggled in opposition to amalgamation. The labor union plans to start the general strike on November 26 and so will take a ballot of union members on November 12.

The labor union of Cho Hung Bank seized the confidential documents of the bank, that is, the original copies and computer diskettes of the top 100 companies’ loan status on October 28. Owing to the seizure, the bidders who are doing the due diligence of Cho Hung Bank have been in trouble.

Hong Seok-Ju, the president of the bank met the president of the Financial Supervisory Commission(FSC) and request to delay the sale period.

He insisted, “We sold approx. 600 billion won of NPL(Non-performing Loan) this year and acquired 100% bad debt reserves for unsecured loan of Hynix. We improved the financial structure. After selling 20% out of the government’s equities to foreign companies, the remaining equities will be disposed by combining with the management right next year as the best solution.”

Chi-Young Shin Kwang-Am Cheon higgledy@donga.com iam@donga.com