South Korea to push corporate reforms despite Hanjin Shipping woes

The South Korean Finance Minister stressed that the government will take measures to minimise the economic and industrial impact from Hanjin Shipping's troubles.

The logo of Hanjin Shipping Co is seen on a replica of shipping containers at its headquarters in Seoul, South Korea. REUTERS.

South Korea will continue with its corporate restructuring as planned, the country’s finance minister said on Wednesday, a few hours after news Hanjin Shipping Co Ltd would file for court receivership as its banks withdrew their support. “The government will swiftly push forth corporate restructuring following the rule that companies must figure out how to survive and find competitiveness on their own while taking responsibility,” said Finance Minister Yoo Il-ho.

Yoo was speaking at a meeting with other government ministers to discuss the structural overhaul of some of South Korea’s major industries. The minister stressed that the government will take measures to minimise the economic and industrial impact from Hanjin Shipping’s troubles.

Commenting on the government’s broad corporate overhaul efforts and the fallout on financial markets, the minister said that much of it has already been priced in, adding the direct impact on stocks, bonds and banks is expected to be limited.

The government also plans to take all measures to cap the losses expected from the Hanjin Shipping debacle, including ensuring on-time shipments through substitute vessels. As previously announced, South Korea will formulate a strategy to strengthen the competitiveness of shipping, shipbuilding, steel and petrochemical industries by September.

Yoo also urged lawmakers to pass an 11 trillion won ($9.86 billion) extra budget, currently awaiting approval in parliament, aimed at creating thousands of jobs lost by the restructuring process. The ratification of the budget has been delayed by squabbling between political parties. ($1 = 1,115.6000 won)