Court chips away at local Nippon Steel assets

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Court chips away at local Nippon Steel assets

Korea’s Supreme Court stepped up legal procedures to liquidate assets of Nippon Steel & Sumitomo Metal that were seized after the Japanese company refused to abide by its ruling last year to compensate Korean victims of forced labor during World War II.

Sources in the Supreme Court exclusively told the JoongAng Ilbo on Tuesday that the National Court Administration, a branch of the Supreme Court that oversees legal administrative duties of all courts across Korea, sent a letter to Nippon Steel on July 8 asking it to submit an opinion about the plaintiffs’ request to sell the seized assets.

The court was said to have asked the Japanese company to respond within 60 days. By law, the Supreme Court can decide to sell the assets even if Nippon Steel does not respond by the deadline.

It appeared Nippon Steel had not received the Korean Supreme Court letter. On Tuesday, a source in the court said the Supreme Court sent the letter directly to Japan’s Ministry of Foreign Affairs, asking it to refer it to Nippon Steel. The letter was still at the Japanese Foreign Ministry on Tuesday, according to the source.

The Supreme Court’s action comes amid a heated dispute between the two neighboring countries that began with its ruling last October, when it ordered Nippon Steel to pay 100 million won ($85,000) to each of four Korean forced laborers who sued them.

A month later, Mitsubishi Heavy Industries, a different Japanese company, was also ordered by the Supreme Court to pay 100 million won to 150 million won each to five women and 80 million won each to six victims who toiled at its plants and shipyards.

Both Japanese companies have refused to comply with the rulings, citing the Japanese government position that a 1965 bilateral treaty normalizing bilateral ties between the countries, which provided the Korean government with an economic fund, settled all compensation matters.

The legal counsels of the Korean plaintiffs have been targeting shareholdings or other assets owned by the Japanese companies in Korea.

Lawyers for the Korean victims in the Nippon Steel case went after PNR, a joint venture between Nippon Steel and Korea’s largest steelmaker, Posco, based in Pohang, North Gyeongsang. The lawyers asked a court in Pohang to seize Nippon Steel’s PNR shares, and in January and March, the court seized them, prohibiting Nippon Steel from selling or giving them away. A total of 194,794 shares of PNR have been seized, which are expected to sell for some 970 million won.

As Nippon Steel continued to refuse to pay, the Pohang court formally began legal procedures to sell the seized shares in May. It sent related documents to the Korean Supreme Court on June 18, and the Supreme Court mailed the papers to the Japanese Foreign Ministry on July 8.

As for Mitsubishi Heavy Industries, a court in Daejeon approved the seizure of the company’s trademark and patent assets in Korea last March. Lawyers representing the plaintiffs in that case said they asked Mitsubishi for talks multiple times, but were rejected. The group said Tuesday it would start legal procedures to sell the seized assets.

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