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| The Bank of Korea | ||
The conglomerates in Korea are struggling to survive in 2009 amid the global economic recession, not to mention small and medium enterprises(SME). Now, the bankers in Korea are closely watching at the management of top six to seven corporations in Korea, which purportedly include a few companies with financial difficulty.
Even more major companies in Korea seem to find difficulty in management as the global economic recession casts long shadow over Korean economy. The bankruptcy of conglomerates might cause economic turmoil such as the one in 1990's because the big companies in Korea could shake not only the real economy but also the financial market.
The creditor banks have plan to launch an auditing program for some conglomerates soon after they release the sales report over the last quarter. Financial authorities also keep monitoring the business activities of conglomerates and plans to restructure each company when they show the sign of ill management.
The Bank of Korea(BOK) said Sunday, "According to the survey about the 4th quarter's loans in last December, the liability index about the loans of local banks went down to negative 38 from negative 19 in previous quarter, or the lowest level since the first index in 1999. And it means that many conglomerates find difficulty in finding the funds for management.
An official at BOK said that the lower this index gets, the more rigid the standard of bank loans get. And he added, "The government financial supports to SME might isolate the conglomerates in Korea."
The sales of major leading companies do not look positive, either. The Financial Information company, FN Guide surveying 128 major companies in Korea on their estimated sales figure said that the sales and net profit over the last 4th quarter in 2008 drop dramatically by 27.6 percent and 50.5 percent, respectively.
Korea Ratings Corporations(KRC) said that 81 companies out of 326 leading corporations in Korea fell under the category of Credit Rank BB+ and 5 went to default of obligation. Last year KRC already downgraded 50 companies.
Financial authorities said that they will have a planning of restructuring the companies when even major conglomerates show an indication of running the business improperly. An official at conglomerates loans department in the bank mentioned, "As soon as we receive the financial reports, the scrutiny on the company finance will be started."
By Kirim Shin
신기림 기자 kirimi99@ajnews.co.kr
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