Seoul to Link Cash to Reform

The government said Friday that it will stop providing cash to corporations owned by locan governments that do not correct problems identified by central supervisory agencies.

"Many public firms in the provinces are still managed poorly, and do not follow the corrective measures of the Board of Audit or the Home Affairs Ministry," a senior official of the Ministry of Planning and Budget said. "Local governments, which are supposed to supervise those practices, have a passive attitude."

Seoul is mainly interested in excessive competition and compliance with restructuring plans. There are 306 local government corporations, with total capital of 25.7 trillion won ($197 billion). They employ 48,000 persons.