[EDITORIALS]Nipping it in the bud

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[EDITORIALS]Nipping it in the bud

Time is being wasted as the ruling party and the opposition party squabble over which of them should be allowed to investigate the bank accounts of the Hyundai Merchant Marine Co. In the meantime, the parties are putting the national economy at risk. The companies involved in a scandal that alleges the state-run Korea Development Bank secretly granted $400 million in loans to Hyundai Merchant in 2000, which the company then supposedly delivered to North Korea, have begun to experience serious cash flow problems.

For example, Hyundai Merchant Marine has been trying to dispose of its vehicle shipping division, which has nothing to do with the scandal. But local commercial banks are backing away from the deal. Companies from Sweden and Norway, which want to buy the division, and Citibank, which is backing up the deal, remain calm, while some domestic banks, which initially made a beeline for the deal, have turned their backs on the deal.

Though not serious yet, Hyundai Engineering and Construction Co. has also complained of difficulty in raising capital.

For a moment, one ought to consider what kinds of companies we are talking about here. These are the firms that Korea turned around at heavy costs after the breakout of the 1997 Asian financial crisis. That turnaround prevented Hyundai Merchant Marine ships from being confiscated at ports around the world. That turnaround spared Hyundai Construction from possible claims at construction projects around the world. That turnaround prevented banks from collapsing.

The answers? Financial Supervisory Commission Chairman Lee Keun-young, who governed the Korea Development Bank at the time of the loan, must step down. The government must start tracing Hyundai Merchant's bank accounts. Without those things happening, a fog of suspicion will never go away. There are other negative factors also looming over the Korean economy besides the scandal. However, we have to cut this bud of uncertainty before it blossoms.
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