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Republicans Slam Bond Buy

Feb 14,2001
Saying that the Korea Development Bank's purchase of Hyundai Electronic Industries' corporate bonds was unfair, Republican U.S. senators submitted a resolution to Congress on Tuesday asking Washington and Seoul to stop the practice.

The Ministry of Finance and Economy said Wednesday that the senators insisted that the state-owned bank's purchase of the bonds violated a loan agreement between the Korean government and the International Monetary Fund, the World Trade Organization's convention on subsidies and tariffs, and tax laws of the U.S. government.

The senators demanded that Seoul suspend the bank's purchase of Hyundai's debt and that Washington take measures to nullify the effects of the takeover.

An official at the ministry denied the charges. "Our move did not break any of the agreements or laws mentioned," he said, "but was a legitimate and complementary measure for the market."

Though not legally binding, the resolution, if passed, could be used by Washington to pressure Seoul in commerce matters.



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