August 07, 1999
| | |
| ||
| August 07, 1999 | atimes.com | |
| ||
| The Koreas Seoul nationalizes Korea Life SEOUL - South Korea gave up efforts to sell off ailing Korea Life Insurance Friday after three failed attempts and will instead inject public funds of up to 2.7 trillion won ($2.2 billion) to normalize operations. The Financial Supervisory Commission (FSC) announced that it had demanded the life insurer's board retire all shares by noon Saturday, threatening to fire all executive members if they do not. Lee Jong-koo, an FSC commissioner, said the difference in Korea Life's debts versus assets dipped to 2.7 trillion won from 2.9 trillion won due to a recent rally in stocks. The government will have the Deposit Insurance Corp. inject funds of 1.35 trillion to 2.7 trillion won into Korea Life. The first 50 billion won will be provided by August 14 and the remaining sum will be injected in early September. It will take up to six years to completely normalize the insurer, Lee said. The government will seek a new CEO after organizing a screening team of insurance and management experts. Lee said it will be difficult to sell Korea Life through a public auction, but the government is open for negotiations if a buyer comes up. The fate of affiliates like Shindongah Fire and Marine Insurance will be decided after a committee of experts is formed, Lee said. Current shareholders and management must account for tax money spent to clean up Korea Life's debts one way or another, but there will be no cuts in staff and outlets, Lee said. Korea Life's board members stirred up controversy by attempting to hold onto management control with the help of investment from Panacom of the United States in a board meeting a day before the government's announcement of nationalization Friday. The government suspects Shindongah Chairman Choi Soon-young was behind the board decision. Choi is in prison for embezzlement and bribery. Korea Life announced Thursday that it will allow Panacom to take part in recapitalization in return for its investment of up to 2.5 trillion won, and reorganized the board members with four Panacom-appointed members included. (Asia Pulse/Yonhap) | |||||||||
 |
|
Front | China | Southeast Asia | Japan | Koreas | India/Pakistan | Central Asia/Russia | Oceania Business Briefs | Global Economy | Asian Crisis | Media/IT | Editorials | Letters | Search/Archive |
back to the top ©1999 Asia Times Online Co., Ltd. |
