By Lee Hyo-sik
Staff Reporter
Kumho Asiana Group and KT were fined a combined 230 million won Tuesday for breaching disclosure rules.
Under securities regulations, listed companies are obliged to make public any changes in their ownership structure and other corporate developments that can influence shares prices.
The Fair Trade Commission (FTC) said 11 units of Korea's eighth largest business group did not abide by public disclosure rules in 13 cases and were fined 153 million won.
Kumho Industrial failed to include a 40-billion-won loan in its latest public notice.
Additionally, four affiliates of the land-based and wireless communication provider KT were asked to pay 77 million won for five cases of breaking disclosure regulations. KT Linkus, a public phone service provider, was found to have delayed the disclosure of corporate information on its real estate lease contract worth 6.6 billion won.
For Kumho Asiana Group, the news comes at a time when it is scrambling to secure fresh funds to resolve its liquidity crunch.
Unless the group finds financial investors willing to invest money by the end of July, it will be forced to dispose of Daewoo Engineering & Construction to its main creditor Korea Development Bank (KDB).
The state-run bank has pushed the conglomerate to sell key subsidiaries, including Daewoo Construction, and other assets to raise funds, as well as attract additional capital from investors to lower debt levels.
In response, the group has pledged to unload a number of assets, including shares in Kumho Life Insurance and Seoul Express Bus Terminal. But it does not want to give up its controlling stake in the country's largest builder.
As a compromise, KDB gave the group a two-month grace period till the end of July, but should it fail to find new investors, it will be forced to sell Daewoo to a private equity fund operated by the state-run bank.
The construction and logistics-based conglomerate has expanded through a series of mergers and acquisitions (M&A) over the past few years. However, the takeovers left it highly indebted and since the credit crunch hit the global financial market hard last summer, its financial health has deteriorated.
The conglomerate has been plagued with rumors that it is facing a liquidity crunch, being forced to pay back loans and saddled with other financial obligations accumulated over the past few years in its acquisition of Daewoo and Korea Express.
The biggest source of trouble is a put option deal it signed with a number of financial investors when taking over the construction firm three years ago for 6.5 trillion won.
Under the scheme, in return for a 3-trillion-won investment, the business group is obliged to buy back Daewoo shares from Kookmin Bank and 17 other financial services firms late this year if they want to sell their holdings, at a pre-set price of 31,500 won per share.
But shares in Daewoo have plunged over the past year amid the slumping real estate market and bearish local bourse. They have been trading at around 11,000 won, signaling that if investors dispose of Daewoo stocks at the current prices, Kumho would have to pay them an additional 4 trillion won.