Korea (South): Whether one can declare bankruptcy in South Korea; whether a declared bankrupt would be subject to prosecution for criminal or civil offences; and, if found guilty, the penalties s/he would be subject to (1998)
| Publisher | Canada: Immigration and Refugee Board of Canada |
| Author | Research Directorate, Immigration and Refugee Board, Canada |
| Publication Date | 1 November 1998 |
| Citation / Document Symbol | KOR30570.E |
| Cite as | Canada: Immigration and Refugee Board of Canada, Korea (South): Whether one can declare bankruptcy in South Korea; whether a declared bankrupt would be subject to prosecution for criminal or civil offences; and, if found guilty, the penalties s/he would be subject to (1998), 1 November 1998, KOR30570.E, available at: https://www.refworld.org/docid/3ae6abc198.html [accessed 31 May 2023] |
| Disclaimer | This is not a UNHCR publication. UNHCR is not responsible for, nor does it necessarily endorse, its content. Any views expressed are solely those of the author or publisher and do not necessarily reflect those of UNHCR, the United Nations or its Member States. |
No recent information on personal bankruptcies or on penalties for declaring bankruptcy could be found among the sources consulted by the Research Directorate.
However, the following information on corporate bankruptcies may be of interest.
Despite the "surge" of South Korea's economy as a whole in 1994, bankruptcies rose (FEER 22 June 1995; Asiaweek 7 Apr. 1995). According to Asiaweek, approximately 11,000 businesses, primarily smaller firms, declared bankruptcy that year (ibid.). In response the government "adopt[ed] an aid package to allow these companies greater access to capital" (Asiaweek 7 Apr. 1995). Government critic Shim Gon-Sub, Managing Executive Director of the Daewoo Research Institute, accused the government of basing its policy on social welfare not on economic reasoning (ibid.). Sources did not report any penalties levied against these businesses for having declared bankruptcy.
On 23 January 1997 Hanbo Steel Co, South Korea's second-largest steel maker, was declared bankrupt (The Australian 5 Mar. 1997). According to the then-President Kim Young Sam, this particular case demonstrated that "corruption and the collusive link between politics and business remain deeply rooted in some parts of our society" (ibid.). Charges were laid, but not because the company had declared bankruptcy: on 20 February 1997 four MPs and six others were indicted with bribery and other charges (ibid.), although by May, more politicians were being investigated, also on charges of corruption (Asiaweek 9 May 1997).
Asiaweek reported in late 1997 that the South Korean central bank had given $1.1 billion in special 8%- annual-interest loans to 16 merchant banks hit by "corporate failures" (24 Oct. 1997). Between July 1997, when the Kia Group came close to the brink of bankruptcy, and October 1997, the central bank had already injected $1 billion dollars into banks and other institutions (ibid.).
The most recent issue of Asiaweek reports a possible change in economic policy, stating that Seoul is
steeling itself to take tough action against chaebol [giant, politically powerful conglomerates] inertia. The government plans to use the powers of the Financial Supervisory Commission to force commercial banks to stop lending to the top chaebol and even recall existing loans if they fail to submit a satisfactory restructuring plan (4 Dec. 1998).
This Response was prepared after researching publicly accessible information currently available to the Research Directorate within time constraints. This Response is not, and does not purport to be, conclusive as to the merit of any particular claim to refugee status or asylum. Please find below the list of additional sources consulted in researching this Information Request.
References
Asiaweek [Hong Kong]. 4 December 1998. "New Chaebol for Old." [Internet]
_____. 9 May 1997. "Scandal." [Internet]
_____. 7 April 1995. "Policy: Timely Help for Small Business." Document No. CX10125. (CISNET)
The Australian. 5 March 1997. Robert Garran. "Korea in Transit." Document No. CX2243. (CISNET)
Far Eastern Economic Review (FEER) [Hong Kong]. 22 June 1995. Mark Clifford. "The Pressures of Winning." Document No. CX10133. (CISNET)
Additional Sources Consulted
Asiaweek [Hong Kong]. Weekly. September 1996-December 1997.
Internet Law Library.
Research Directorate. "South Korea" legislation file.
Electronic sources: Internet, IRB Databases, NEXIS, REFWORLD.
Non-documentary sources:
Unsuccessful attempts to contact the Embassy of the Republic of Korea, Ottawa.
Unsuccessful attempts to contact two other oral sources.
