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Kang Seung-woo

Korea Times Business Reporter

Kang Seung-woo is the Business Desk editor at The Korea Times. Prior to this position, he covered politics, national affairs, finance and sports.

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Companies

Shinhan’s internal feud takes new turn

Korean-Japanese shareholders set against dismissal of Shin By Kang Seung-woo The internal feuding at Shinhan Financial Group is taking a new turn as one of four Korean-Japanese outside directors ruled out the possibility of dismissing CEO Shin Sang-hoon, hinting that they will all vote against the group’s move to oust him. The outside director residing in Japan made an unscheduled visit to Seoul Tuesday to meet Chairman Ra Eung-chang. At a meeting with reporters following talks with Ra, he said that the internal fighting is not likely to end up in Shin’s dismissal. “The board meeting can take place even before the prosecution completes its investigation,” Cheong Hang-nam, an adviser of the Korea Chamber of Commerce and Industry in Japan, said in Japanese. “If the group holds a board meeting and contacts me, I will participate any time,” he added. “But I do not think the board of directors will dismiss Shin.” With the sudden visit by the outside director, the group is expected to hold a board meeting as early as Friday, but the feuding is likely to unfold in an even

Sep 7, 2010By Kang Seung-woo
Companies

Property market slump to linger

By Kang Seung-woo The chief of the financial watchdog said the sluggish property market and rising household debt could pose major stumbling blocks to Korea’s economic recovery. “If the current housing market slump becomes long-term and the continued interest rate hikes are feared to worsen debt repayment abilities among low-income households,” Financial Supervisory Service (FSS) Governor Kim Jong-chang said in his speech at a reunion of Advanced Innovative Management Program (AIM) at the Korea Advanced Institute of Science and Technology (KAIST), Tuesday in Seoul. He also said both the sharp fall in house sales and the rising number of unsold apartments are extending the slump in the real estate market and a steep decrease in home prices will cause trouble in the financial market, the health of household debts and the financial health of builders. As of March 2010, local household debts totaled 660.6 trillion won ($564.15 billion), which was a high level and mainly caused by mortgages. Mortgage lending represents more than 50 percent or 337.9 trillion won, of the tot

Sep 7, 2010By Kang Seung-woo
Companies

Citi card users pay dearly for cash services

By Kang Seung-woo Foreign banks’ credit-card subsidiaries charge a higher percentage of interest rates for cash advance services to their clients than domestic card firms. According to the Credit Finance Association of Korea (CFAK) Monday, a majority of credit-card users pay an average of more than 20 percent in interest for a cash advance, but the proportion of those who pay interest of 20 percent or more surpassed 80 percent of credit-cards issued by Citibank, Standard Charted (SC) First Bank and Korea Exchange Bank (KEB). 94.9 percent of Citibank credit-card users pay 20 percent or higher, while SC and KEB mark 87.4 percent and 84.2 percent, respectively. Those numbers are well above the average of around 25 percent of cards issued by Korean firms that pay similar interest rates. For Shinhan, the total ratio of users who are charged with interest at 20 percent or higher accounted for 64 percent, with 31.7 percent charged between 10 percent and 20 percent. At the same time, the portion for cardholders who pay 20 percent or higher interest payments among card-spe

Sep 6, 2010By Kang Seung-woo
Companies

Hana Financial posts steepest BIS ratio drop

By Kang Seung-woo Hana, KB, Standard Charted (SC) and Korea Development Bank (KDB) posted the steepest drops among financial groups in their Bank for International Settlements (BIS) ratio in the second quarter from the first. The Financial Supervisory Service (FSS) announced Monday that Hana’s capital adequacy ratio weakened 0.75 percentage points from three months earlier, KB declined 0.59 percentage points and the two other holding firms each lost 0.33 percentage points. The average ratio of seven financial services companies logged 13.26 percent as of the end of June, down 0.27 percentage points from the preceding quarter, marking the first setback since the third quarter of 2008. Woori Financial Group lost 0.3 percentage points, while Shinhan Financial Group shed just 0.13 percentage points. The financial watchdog said that sluggish earnings of the holding firms resulted in the April-to-June period denting their capital bases. The FSS said the equity capital of the companies decreased 0.5 percent, or 500 billion won, due to diminution of net profits and subordinat

Sep 6, 2010By Kang Seung-woo
Companies

Hyundai-Kia to pay subcontractors in advance

Hyundai-Kia Automotive Group has decided to make an advance payment to its subcontractors to help improve their cash flow. About two weeks ahead of the Chuseok holidays, the Korean equivalent of Thanksgiving, the country’s largest automaker said Sunday it will pay money for employees’ salaries at subsidiaries and raw material suppliers up to one month earlier than their due dates. Under the plan, 1 trillion won out of 1.8 trillion will be given out to 1,150 subcontractors in advance. The group makes for domestic payments every Thursday, but considering the three-day holiday, it will make the payments earlier. In addition, around 200 affiliates in financial trouble will receive money slated for October. The group will monitor the early payment that will be given to subsidiaries immediately. “We expect that this measure will help subcontractors settle financial problems,” a representative of the group said. “We will continue to financially support those making efforts in technical development and quality improvement.” Meanwhile, the group has recently announced

Sep 5, 2010By Kang Seung-woo
Companies

Businessline

POSCO to support smaller firms POSCO has stepped up its efforts to support struggling small- and medium-sized enterprises (SMES) by pursuing a win-win management strategy initiated by the government. To that end, the world’s No. 3 steelmaker announced Sunday that the company will make an intermediate payment in its purchases of equipments from SMEs from this month in order to improve their cash flow. It said that the new scheme applies to any contract worth more than 100 million won, with more than 180 days until the payment deadline remaining. Under the scheme, subcontractors can get cash in three installments _ deposits (20 percent), middle payment (30 percent) and the remainder (50 percent). Based on last year’s record, POSCO would be required to make a middle payment worth up to 747 billion won this year and pay 220 billion won in advance. “POSCO will continue to make efforts to promote a win-win strategy with smaller subsidiaries in the future,” said Chung Joon-yang, chairman of the steel giant. Korea, ADB to host Mekong Development Forum Korea and the

Sep 5, 2010By Kang Seung-woo
Companies

Trade account in black for 7th straight month

By Kim Jae-won The nation’s trade account recorded a surplus for the seventh consecutive month in August on the back of robust exports of semiconductors and passenger vehicles. The Ministry of Knowledge Economy reported Tuesday that the trade surplus reached $2.08 billion last month, with exports outperforming imports amid a gradual recovery of the global economy. Exports surged 29.6 percent to $37.53 billion last month from a year ago, with imports gaining 29.3 percent to $35.45 billion. The August figure was a setback from the previous month’s $5.51 billion surplus, the third-largest since it began compiling related data in 1950. “The decline was expected since most workers went on their summer vacations in August,” An Byung-hwa, head of the ministry’s export-import division, said. An said that overseas demand for locally made products such as semiconductors and autos all fueled exports that actually grew at a faster pace than in the previous month. Outbound shipments of semiconductors and cars rose 59.6 percent and 27.5 percent each year-on-year, respectively

Sep 1, 2010By Kang Seung-woo
Companies

More incentives to be offered for FEZ foreign investors

By Kang Seung-woo The government is offering an improved package of incentives to lure foreign investors into free economic zones (FEZs). The Ministry of Knowledge Economy announced Wednesday that at least 10 percent of the land in each free economic zone will be allocated to foreign companies, with rental fees to be reduced by 75 percent to even 100 percent, depending on the size of the investment. The rent period will also be extended up to 50 years. In addition, the government plans to provide more services and support, including tax relief for foreign investors in the free economic zones. For example, in its bid to attract foreign commercial medical institutions, they will allow doctors and nurses who acquire their licenses overseas to work in these special zones. The government named three regions _ Incheon, Busan-Jinhae and Gwangyang Bay _ in 2003 and it added three more areas _ Yellow Sea, Daegu-North Gyeongsang Province and Saemangeum-Gunsan _ in 2008, with the goal of turning Asia’s fourth-largest economy into a hub in Northeast Asian logistics. “It is tr

Sep 1, 2010By Kang Seung-woo
Companies

ERGO seeks to expand here

By Kang Seung-woo ERGO Insurance Group plans to earn recognition as a general insurer in Korea with a variety of non-life insurance products. “As signified by its advancement into the Korean market along with the Indian market, ERGO Group recognizes the value of the market,” Torsten Oletzky, chairman of ERGO Insurance Group, told reporters in a press conference in Seoul, Tuesday. “From now on, diverse products of ERGO Group shall be introduced to the market by taking a chance on ERGO Daum Direct’s transformation into a general insurance company.” The German insurer, Munich Re’s primary insurance subsidiary, made its foray into the Korean insurance market in 2008 after purchasing a 65 percent stake in Daum Direct Auto Insurance, an online auto insurance unit of Daum Communications. ERGO Daum Direct Auto Insurance received regulatory approval in September 2009 to sell six different non-life insurance products and it changed its name to ERGO Daum Direct General Insurance in June. As part of becoming a comprehensive insurer, ERGO, which started offering insurance for dr

Aug 31, 2010By Kang Seung-woo
Opinion

Where is Chung taking POSCO?

By Kang Seung-woo POSCO is flexing its muscles in the M&A market. Flush with cash and a strong business model, the world’s No. 3 steelmaker has just acquired Daewoo International, a trading firm with extensive rights to explore natural resources. Now, attention is focused on predicting the next move by the steelmaker who, under its Chairman Chung Joon-yang, seems to be seeking the next target in its expansion effort to find future growth engines. Could it be acquiring Daewoo Shipbuilding and Marine Engineering or gaining a stake in the Woori Financial Group? As expected, company officials as well as CEO Chung are holding their cards close to their chest, not dropping any hints. “We do not have any plans (to take over Daewoo Shipbuilding and Marine Engineering) yet,” the 62-year-old told reporters after the takeover of Daewoo International. Once POSCO tried to take over Daewoo Shipbuilding but the deal fell through after its partner GS Group balked at the last minute. Still, that was before Chung’s time whose leadership makes an enticing promise that its acqu

Aug 31, 2010By Kang Seung-woo
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