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Gov`t Urged to Begin Industry-wide Restructuring

Posted February. 04, 2009 08:54,   


The ruling Grand National Party urged the government yesterday to conduct industry-wide restructuring instead of the corporate streamlining now spearheaded by banks.

Strategy and Finance Minister-designate Yoon Jeung-hyun also pledged an overhaul of the corporate restructuring system.

Yim Tae-hee, the party’s chief policymaker, told reporters, “Banks have been in charge of corporate restructuring but have produced no tangible results. Given the limits of the restructuring by the market, now is the time for the government to step up to the plate.”

“(Considering the severity of the situation,) the government should conduct restructuring by industry not by company in collaboration with offices such as the Strategy and Finance Ministry, the Knowledge Economy Ministry and the Financial Services Commission, as it did in the Asian financial crisis of 1997-98.”

President Lee Myung-bak was briefed on the plan at a meeting on emergency economic measures.

Critics say corporate restructuring led by creditor banks has largely failed, citing credit risk assessments of construction companies and shipbuilders have selected only two companies for liquidation.

The ruling party’s plan urges the government to assess the viability of companies in construction, shipbuilding, shipping, semiconductors and cars based on their investment and future performance, and screen out companies subject to consolidation or liquidation.

Yoon told The Dong-A Ilbo over the phone, “I’m closely analyzing the process of corporate restructuring led by banks. After taking office, I will begin discussion based on the results of the analysis.”

He also mentioned calls for industry-wide restructuring, saying, “A revised plan for corporate restructuring will be announced soon through the Financial Services Commission.”