[EDITORIALS]Troubling reports on Posco

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[EDITORIALS]Troubling reports on Posco

Is Posco truly privatized? This question has been raised by the revelation that the world's largest steelmaker entered questionable deals with Choi Gyu-seon, after the firm's chief executive, Yoo Sang-boo, met with him and Kim Hong-gul, President Kim Dae-jung's third son, in July 2000.

Whether Lee Hee-ho, the first lady, arranged the meeting is a separate issue. At this point, we are seriously concerned about the soundness and future of the steel giant. Posco is more than just a Korean company. Ever since the government broke ground on a $73 million steel mill on a beach near Pohang in March 1968 with money received from Japan as part of compensation for its colonial rule of Korea, Posco has been the icon of Korea's industrialization. Posco's growth to become the world's largest steelmaker is a miracle of the Korean economy, an achievement that surprised the world.

In 1998, the government offered Posco shares to Koreans to give them a chance to share the results achieved with taxpayers' money. This administration privatized the company in a bid to free it from the restraints on a state-run firm. In October 2000, the government shed its remaining stakes, held by the state-run Korea Development Bank, leaving it without a single share of stock in Posco. The Kim administration trumpeted Posco's privatization as a symbol of the government's commitment to reforming public concerns.

Reports indicate that after Posco's top management met with the president's son, the company purchased shares in Tiger Pools International, a lottery manager, at above the market price and supported the establishment of a venture capital company. How do foreign investors view such deals by Posco, of which foreign investors own more than 60 percent? Those who have scarred Posco should be held responsible, particularly the firm's top management who tried to buy the influence of the powerful.
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