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Korean experts are up in arms over what they see as tendentious reporting by the U.K.'s Financial Times, which some hint amounts to Korea-bashing with the intent of furthering the interests of British-based investment funds. They are upset by expressions like ¡°anti-foreigner sentiment¡± or ¡°schizophrenic phenomenon¡± in reports by the FT on caps on the number of foreign directors in a Korean bank and a rule requiring investors who acquire more than a 5 percent share in a publicly traded company to disclose the purpose of their investment.
The FT reported in an article headed ¡°EU Will Challenge Restrictive South Korean Bank Bill¡± in its Monday edition, ¡°The European Union is drawing up plans to challenge through the World Trade Organization a South Korean bill limiting the number of foreigners allowed on boards of local banks.¡± Although Korean Finance Minister Han Duck-soo made it clear on Friday that Korea would not limit the number of foreign directors, the business daily worded the report as though Korea were determined to go ahead. The Korean government opposes a limit of the number of foreign directors on the grounds that the measure could violate WTO rules.
On March 31, the paper slammed Korea¡¯s so-called 5 percent rule that requires investors owing more than a 5 percent share in a specific company to disclose the purpose of their investment, saying it was hurriedly introduced to clamp down on some foreign investors. When Korean Financial Supervisory Service chairman Yoon Jeung-hyun first mentioned a cap on the number of foreigners on local banks¡¯ boards, the FT labeled the move protectionist and nationalistic.
Korean financial experts say it is hard to understand why the FT should single out Korea¡¯s 5 percent rule -- which applies to overseas and domestic investors alike -- and a limit on the number of foreign directors, considering that other countries have similar systems.
Seoul says the U.S.¡¯ Federal Bank Law stipulates directors of banks conducting business on a federal basis must have American citizenship, and the majority of them must have lived in the U.S. at least for a year before being appointed to the board. Canada and Singapore also state that more than two-thirds or half of bank directors must have the countries¡¯ citizenship. Although they have no legal stipulation regarding the number of foreign bank directors, European countries including Germany restrict the nationality and qualifications of bank directors in administrative guidelines.
The U.S and Japan also have rules similar to Korea¡¯s 5 percent rule. Ministry of Finance and Economy official Choi Sang-mok said, ¡°Korea¡¯s 5 percent rule is similar to that of the U.S. It meets the global standard and doesn¡¯t impose an unreasonable burden on foreign investors.¡±
Then why, experts ask, is the FT singling out Korea? Korea Institute of Finance researcher Kang Jong-man said, ¡°For speculative foreign investors who have so far invested in the Korean market without limitations, Korea¡¯s financial policy changes will be bothersome. One wonders whether the FT represents the interests of U.K.-based investment funds like Hermes.¡±
(englishnews@chosun.com )
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