Quick Decision Needed on HyundaiThe announcement on Friday that insolvent businesses would begin a variety of restructuring programs is likely to create problems. Twenty-nine businesses, including Dong-A Construction, will be put under court protection, but there is concern that the announcement will cause further deepening of public distrust of the government and the creditors. The plan falls far short of public expectations, which have been repeatedly bolstered by loud pledges from the government, including some from President Kim Dae-jung.
The fate of Hyundai Construction, the focal point of public concern, remains unclear. The creditors put off a final decision on the firm, but they merely cited formalities, saying, "The company cannot be put under court protection because it is not dishonoring its bills at this moment." Perhaps they are trying to induce the owners of the company to take more positive measures. Or maybe they are worried about the impact on the national economy of the simultaneous restructuring of two giant construction companies, Dong-A and Hyundai.
The creditors are unwise to do this. They should not give the impression that they are reluctant to condemn a business just because it is big. Besides, Hyundai will inevitably be on its way to liquidation the moment its name appears on the list of insolvent businesses regardless of the creditors'' decision on its fate. Rather than talk about formalities or use vague phrases like "the direction is toward court protection," the government and the creditors should make a clear decision right now and send concrete and clear messages to the public. The problems will not go away because the government and the creditors seek to evade their responsibilities.
We are also concerned by the government''s announcement of 29 company names. It is disturbing that the government and the creditors should try to look tough on debtors by artificially increasing the number of businesses that must be restructured. Samsung Commercial Vehicles, Daehan Tungsten and Halla Resources were practically under liquidation for some time. Jindo and several Daewoo companies are already being sold off. A few other businesses, including Ilsung Construction, are under court protection, and the court, offended by the announcement, has protested. This effort by the government and the creditors to mislead the public is ridiculous.
Furthermore, the suggestion by Jin Nyum, the minister of finance and economy, that he is expecting the support of other Hyundai companies was not appropriate. Until now, the government has encouraged conglomerates to break up into smaller units and prohibited mutual assurance between sister companies. On what grounds, then, could the minister expect contributions from other Hyundai companies to Hyundai Construction?
We demand that the government not repeat this mass restructuring, which is little more than showing off. Two years ago, when there was much talk of restructuring insolvent businesses, the government stressed that such programs would take place when market conditions dictated and that the government would not interfere. We demand that the government explain why it has gone back on its word. In the future, it must keep to its stated principles. The government and the creditors must remember that many of the businesses included in the new plan were the same businesses that were considered for restructuring two years ago. In many cases it is not only the owners and managers of the businesses who are responsible for the insolvencies. The government and the creditors also bear responsibility.
by Chun Chu-song