Kang Seung-woo

Nonghyup, Shinhyup in trouble

By Kang Seung-woo The nation’s financial watchdog has been investigating whether local mutual cooperatives violated rules on household loan extensions amid snowballing household debt, sparked by the non-banking sector. According to the Financial Supervisory Service (FSS) Monday, it launched an investigation into 50 branches of the National Agricultural Cooperative Federation, or Nonghyup, and National Credit Union Federation of Korea, or Shinhyup, last week to check into irregularities concerning their extension of household loans. The FSS believes the two mutual cooperative funds issued loans in violation

U.S. Ambassador to Korea Sung Kim, right, talks with ...

’Steel King’ Park Tae-joon dies

By Kang Seung-woo Park Tae-joon, founder and honorary chairman of steel making giant, POSCO, died of lung disease, Tuesday. He was 84 years old. Park, nicknamed “Steel king,” was one of Korea’s first-generation leaders in its industrialization that started from the ashes of the 1950-1953 Korean War and led it to become one of the world’s leading industrial powers. According to officials at POSCO and doctors at the Shinchon Severance Hospital in Seoul, Park was treated last month after experiencing difficulty in breathing and was recuperating after an operation. The Seoul-based hospital said that surgery was performed due to side effects from an operation to remove a tumor from his pleura in the United States 10 years ago. However, Park was hospitalized last week after his lung condition deteriorated again. He is survived by a wife, one son and four daughters. “It is heartbreaking that such a great leader who greatly contributed to Korea’s industrialization,” President Lee Myung-bak said in a statement. The Federation of Korean Industries (FKI) also offere

Non-mortgage loans set to peak

By Kang Seung-woo Household loans that exclude mortgages are expected to surpass a record 250 trillion won ($216.25 billion) by the end of the year, the central bank said Tuesday. This means a rising amount of loans taken out to support daily livelihoods at a time of high inflation and a slumping global economy, analysts said. Worse, interest rates for borrowing have climbed back to the level of the global financial crisis, which is expected to increase debt burdens. According to the Bank of Korea (BOK), the balance for miscellaneous loans that excluded home-equity loans from total household borrowing from the banking and non-banking sectors totaled 245.2 trillion won as of the end of September, up 9.1 percent from a year earlier. Assuming the upcoming fourth-quarter borrowing matches last year’s 8.4 trillion won, the outstanding loans for 2011 are likely to break the 250 trillion won mark. The miscellaneous borrowing includes demand deposit accounts with negative balances, unsecured loans and collateral loans based on deposits and installment savings. Unlike home-

Big law firm mired in conflict of interest case

By Kang Seung-woo The nation’s anti-trust watchdog has raised a conflict of interest issue over a major law firm’s recent defense of life insurers’ price rigging. In response, the law firm has rebutted the claim. It is unlikely to face any penalty because the involved insurance companies do not intend to press charges against the firm. According to the Fair Trade Commission (FTC) Monday, Bae, Kim and Lee, represented three life insurers ― Korea Life Insurance, Shinhan Life Insurance and Tong Yang Life Insurance ― in a price-fixing case, where the FTC in October fined 12 life insurers a combined 365.3 billion won ($319.27 million) for colluding to rig interest rates for years. Korea Life, which was penalized 48.6 billion won at the time, was exempted 12.1 billion won for cooperating with the investigation, while Shinhan and Tong Yang, which denied colluding, were handed 3.3 billion won and 2.4 billion won in fines respectively. The ethical code stipulates that one lawyer should not defend multiple clients whose interests clash. “It is not clear to call our case a

POSCO founder Park Tae-joon dies at 84

By Kang Seung-woo Park Tae-joon, founder and former chairman of Korean steel giant POSCO, died Tuesday afternoon after a surgery to treat a type of lung disease, according to Seoul’s Severance Hospital. He was 84. Park had been hospitalized since last month after experiencing flu-like symptoms and breathing difficulty. Park has been treated at the hospital’s intensive care unit since his surgery, but his condition took a turn for the worse last week, sources said. He had been the company’s honorary chairman. POSCO officials said that Park recently underwent a surgery to remove a cystic in his lung. The South Gyeongsang Province native has been considered as one of the founding fathers of Korea Inc. He established Pohang Iron and Steel, POSCO’s predecessor, in 1968 after previously working for Korea Tungsten, which is now the Warren Buffett-owned TaeguTec. During its first decade of existence, the Pohang-based steel firm grew into an industrial giant that produced 5.5 million tons of steel annually. Park stepped down from the company’s chairmanship in 1992 to fully co

Persian trouble to cost Hyundai, SK extra

By Kang Seung-woo With the United States moving toward new sanctions on Iran‎, oil refiners are closely watching the Korean government’s response on whether to cut or suspend crude oil imports from the country. Currently, Hyundai Oilbank and SK Innovation are importing 20 and 10 percent of their crude oil from Iran, respectively. The two firms said that they are now keeping a close watch on how the situation develops without seeking any countermeasures. “We have to await the government’s response because the government said that it will try to avoid a cut or suspension of crude oil imports from Iran,” said an official of Hyundai Oilbank. “If the government joins the sanctions, we need to find new import channels.” An SK official also said that there is no specially-prepared plan for a new development saying, “As nothing has been decided by the Korean government, we are just closely monitoring how the conditions develop.” Hyundai said that the possible sanctions are likely to damage the nation’s fourth-largest oil refiner. “As we have stably imported cru

S-Oil CEO wins Korea’s top industrial award

By Kang Seung-woo S-Oil CEO Ahmed Subaey won the Gold Tower Order of Industrial Service Merit Monday for his contribution to the nation’s industry at a commemorative ceremony of Trade Day. It is the second time for a non-Korean to claim the prestigious award. The Saudi Arabian CEO was given credit for improving Korea’s trade balance on the back of exports of oil products and massive investments. Subaey worked at Saudi Aramco, Saudi Arabia’s state-owned oil company and the largest shareholder of S-Oil, for 27 years before taking over as head of the nation’s third-largest oil refiner. “S-Oil’s growth-driven export strategies have contributed to the local oil-refining industry, usually associated with domestic demand, becoming a strong proponent of exports,” the CEO said. “S-Oil will make efforts to strengthen its capability in exports and look for new overseas markets on its way to contributing further to the Korean economy.”

Consumption dips

Department stores, carmakers, card firms struggling By Kang Seung-woo The European sovereign debt crisis is hurting Korea’s domestic demand, as department stores’ sales suffered a first decline in nearly three years last month and car sales are also on a downward path, the finance ministry said Sunday. According to the latest figures from the Ministry of Strategy and Finance, sales at the nation’s three major department stores ― Lotte, Hyundai and Shinsegae ― dropped 1.1 percent from a year earlier. The November reading marked the first year-on-year decline since the 0.3 percent contraction in February 2009, when Asia’s fourth-largest economy was hit hard in the wake of the global financial crisis, sparked by Lehman Brothers’ bankruptcy in late 2008. The department stores’ sales posted a double-digit increase for four consecutive months since October last year, peaking with a 24 percent expansion in January this year. Those of large discount stores posted a 0.3 percent year-on-year growth during the same period. The domestic automobile sales by industry leader Hy

Regulators look to complete savings bank cleanup

By Kang Seung-woo The financial authorities’ efforts to normalize remaining troubled savings bank are entering the final stage. According to the Financial Services Commission (FSC) on Sunday, the Financial Supervisory Service (FSS), its executive unit, is scheduled to wrap up further investigations into six savings banks this week and the FSC will come up with a clear-out list early next year. The FSS inspection is currently checking if they properly announced their third-quarter profits and their normalization process such as asset selloffs and capital increases lived up to plans submitted to the FSC. The six savings banks under review are those who survived the government’s mass suspension of distressed secondary lenders on Sept. 18. Completing a two-month inspection of 85 local savings banks that focused principally on their debt conditions and capital adequacy ratios, the FSC requested 13 savings banks with unhealthy financial conditions to submit plans for normalization and suspended seven of them whose Bank for International Settlements (BIS) ratios came in below