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Pensions and Funds to Be Used in Protecting Corporate Ownership

Pensions and Funds to Be Used in Protecting Corporate Ownership

Posted November. 15, 2004 23:01,   


Deputy Prime Minister (DPM) and Minister of Finance and Economy Lee Hun-jai said on November 15 that pensions and funds will be used in protecting corporate ownership of domestic companies against hostile mergers and acquisitions (M&As) of speculative foreign capital.

The deputy prime minister asked the National Assembly “to help pave the way in the political sector so that various private capital such as pensions and funds can be invested into the stock market” at the governmental hearing of economic sector held at the National Assembly.

“In order to deal with possible risks, we need to nurture institutional investors such as pensions and funds, and shape up companies in investment and trusts so that they can do what they were meant to do,” said the deputy minister, announcing that a corporate ownership protection devise will be put together within this year which will be fortified from the American version though not as strong as that of Europe.

DPM Lee also said that the most appropriate level of foreign exchange reserves is around $150 billion, and he added, “$20 billion from the current total of $170 billion can be seen as a reserved fund for the unification of Korea.” He said, “The reserved fund will be actively put to use to enhance profitability through Korea Investment Corporation.”

Meanwhile, Prime Minister Lee Hae-chan revealed a negative view in regards to the big-scale tax cut policy being prepared by the Grand National Party at the National Assembly on the same day, saying, “An additional tax break of such scale should be done very carefully as we are already on deficit spending because it may permanently lodge us in a financial deficit structure and undermine solid growth.”

Jong-Koo Yoon jkmas@donga.com