Sales Price Stirs Up Words Of Criticism at Assembly

The Finance and Economy Committee of the National Assembly happened to have a periodic hearing on the Korea Development Bank, the main creditor of Daewoo Motor, on Friday. Assembly members were rather skeptical about the agreement between General Motors and the creditors.

"The matter of Daewoo, which has long been considered a leader in the Korean economy, is not resolved," said Kang Un-tae, a Millennium Democratic Party official. Most congressmen criticized the method of the sale and sales price. "Among Daewoo's 12 trillion won ($9.23 billion) debt, the write-off of 10.7 trillion won would be inevitable excluding 1.3 trillion won debt that is expected be converted to equity. How are you going to deal with that?" said Mr. Kang.

"The sales price is 6.4 trillion won lower than the bid price by Ford," said Chung Sye-kyun, another ruling party official.

"How are you going to explain all the speculation related to the sale given by government officials including Jin Nyum, the deputy prime minister?"

"The book value of the Bupyeong plant is 2.2 trillion won, but the value as a going concern is only 90 billion won," said Kim Dong-wook, a Grand National Party official, "The Bupyeong plant should be liquidated."

by Lee Soo-ho