|
The state-owned Korea Coal Corp. is said to be facing a loss of W110 billion after loaning W180 billion to a bankrupt construction company (US$1=W988). The corporation had to borrow the money it lent the builder and obtained the loan by forging documents. The company's director and superintendent of asset management and other officials led the illegal investment. The company's president, who was briefed about the incident later, is said to have looked the other way in order to keep it under wraps. This so-called president simply came to work every day and collected his salary, completely oblivious to the fact that almost half of last year's W370 billion budget was being leaked out. When this president, who had served as the magistrate of Jeongseon County three times, was appointed to his post in February of last year, there were widespread rumors that a powerful member of the Roh Moo-hyun administration had played a major role in the appointment.
In May last year, the coal corporation obtained W41.8 billion in loans to invest in its facilities but instead used the money to purchase corporate promissory notes issued by a bankrupt builder. The corporation is said to have fallen for a marketing pitch by a brokerage promising high returns. When it realized it was about to lose all the money because nobody was willing to buy the builder's promissory notes, the corporation poured more money into the bankrupt company in order to save it. Then it fabricated a document saying it needed W110 billion to cover retirement pay for its employees and reported this to its board. Corporate bonds were issued to raise the money. From June to November, the corporation lent W180 billion to the bankrupt builder in 31 installments. It didn't even bother to collateralize the loan and W110 of it is said to be irrecoverable.
The coal corporation racks up between W60 billion to W100 billion in losses each year as it pays out coal and mining subsidies. As of the end of 2006, capital encroachment snowballed to W487.5 billion. Last year the corporation got W136.2 billion in investment and subsidies from the government, and 40 percent of its annual budget comes from taxpayers' money. Despite its pathetic financial situation, the corporation made a foolish and costly bet. Clearly the company officials involved in the loss have no conscience.
Other state-run companies are not much better than the coal corporation. Whenever the Board of Audit and Inspection and the National Assembly look into their finances, all kinds of infractions are detected. The only way to deal with this problem is to waste no time in privatizing state-run companies and, until then, monitor them around the clock, all year long.
|
