Press Release of September 26, 1998
Measures toward 4 securities houses'
management improvement plans
- The Financial Supervisory Commission (FSC, Chairman Hun Jai Lee) held a meeting on September 25, 1998 and decided on the conditional approval of the management improvement plans of Ssangyong Investment & Securities Co. and SK Securities Co. and the disapproval of the management improvement plans of KLB Securities Co. and Dongbang Peregrine Securities Co..
- Required measures for conditionally approved securities houses ; Utilizing input from the evaluation report on management improvement plans of the Appraisal Committee, the FSC approved the following measures.
O Ssangyong Investment & Securities Co. and SK Securities Co. will be required to make supplementary measures concerning their management improvement plans and to submit detailed implementation plans and a memorandum of implementation by October 24, 1998.
O Ssangyong Investment & Securities Co.
· Further self-restructuring efforts including the sell-off of held real estate properties.
· Right issues and subordinated loans from H&Q to be secured by the end of Dec., 1998.
O SK Securities Co.
· Devise plans to recapitalize through increasing equity stake of major shareholders.
· Right issues of 200 billion won to be secured by the end of December, 1998.
· Developments relating to suits currently under court proceedings and the preparation of plans to secure a sufficient level of equity capital even if losses are incurred as a result of final outcome of the suits.
- Reasons for disapproval of the other securities houses
O KLB Securities Co.
· The company applied for business suspension on a voluntary basis.
· Concerns toward the recipient (the parent bank) of government's financial support making equity capital contribution to a distressed financial institution.
※ The parent bank, Korea Long Term Credit Bank, will receive financial support from the government.
O Dongbang Peregrine Securities
· Uncertainty toward the funding capability of entities that intend to participate in rights issues.
- Future plans
O Securities houses that received conditional approvals with regards to management improvement plans will be required to submit a memorandum of implementation and will be monitored for satisfactory implementation on a quarterly basis.
O Securities houses that received disapprovals with regards to
management improvement plans will be subject to business suspension as of September 26, 1998 until Oct. 24, 1998.
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Structual Reform Planning Unit
Financial Supervisory Commission