Guarantee Insurer Gets $3.8 Billion

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Guarantee Insurer Gets $3.8 Billion

The government committee commissioned to manage bailout funds said Wednesday that the Korea Deposit Insurance Corporation and the Financial Supervisory Service will launch an investigation of Seoul Guarantee Insurance Company.

The committee wants to know if the firm's insolvency was due to employee misfeasance.

The committee also agreed to provide 5 trillion won ($3.8 billion) of bailout funds to the troubled insurance firm. One trillion won will be paid in quickly because of the shakiness of domestic investment and trust companies.

"The bailout funds to be provided to Seoul Guarantee Insurance Company will actually go to the investment and trust companies," a source at the funds management committee said. "With the new money, the liquidity of investment and trust companies should be greatly improved."

Seoul Guarantee Insurance Company owes 2 trillion won to its policyholders to cover corporate bonds that have already matured, and additional 4 trillion won for more corporate bonds maturing before the end of the first half.
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