Tokyo warns about asset seizure

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Tokyo warns about asset seizure

Tokyo will “seek damages” from the Korean government if assets seized from Japanese companies get sold off, officials of Japan’s Foreign Affairs Ministry warned Tuesday.

How the Japanese government would seek damages was not specified, but the Tokyo-based Nikkei Asian Review quoted Japanese Foreign Minister Taro Kono as telling reporters that his government “will have no choice but to take action if real harm is done to Japanese companies” ordered by Korea’s Supreme Court to pay damages to Koreans forced to work during World War II.

An unidentified source at the Japanese Foreign Ministry reportedly added, “If the companies that are hurt are not rescued, we will seek damages from the South Korean government.”

The Nikkei Asian Review said Tokyo would consider any sale of seized assets to be a “red line” because Japan believes that all claims to wartime reparations were settled under a bilateral treaty signed in 1965, through which Japan provided Korea with $300 million in grants and $200 million in lending.

Comments from the Tokyo officials about the seized assets came shortly after the JoongAng Ilbo exclusively reported Tuesday that 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 Korean paper that the highest court sent a letter to the Japanese Foreign Ministry on July 8, asking it to refer it to Nippon Steel. The letter asked the company to submit an opinion within 60 days about the plaintiffs’ request to sell the seized assets. By law, the Supreme Court can decide to sell the assets even if Nippon Steel does not respond by the deadline.

The Supreme Court’s action was the latest development in the heated dispute between the two neighboring countries that began with a 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. 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 asked a court in Pohang, North Gyeongsang, to seize Nippon Steel’s shares in PNR, a joint venture between the Japanese company and Korea’s largest steelmaker, Posco, which is based in Pohang. 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 and sent related documents to the Korean Supreme Court on June 18. The Supreme Court mailed the documents to the Japanese Foreign Ministry on July 8, asking it to pass them on to Nippon Steel, though it was unclear whether the delivery actually took place.

In the Mitsubishi Heavy Industries case, a court in Daejeon approved the seizure of two trademarks and six patents the company owns in Korea last March, which are worth some 804 million won.

Lawyers representing the plaintiffs in that case said Tuesday they would start legal procedures to sell the seized assets. If the court decides to sell the assets, they will be put on the auction block and sold to the highest bidder, whose payment will go to the plaintiffs.

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