Government fails to monitor bailout funds: Kim Dae Jung
Government fails to monitor bailout funds: Kim Dae Jung
Associated Press, Seoul
President Kim Dae-jung admitted Saturday that his government
has failed to properly supervise the use of US$116.8 billion it
has supplied to bail out struggling banks in the wake of the
1997-98 Asian financial crisis.
His acknowledgment came two days after government auditors
said 4,976 businessmen receiving government bailout funds
pocketed $5.1 billion in hidden real estate, bogus overseas
investment and other forms of embezzlement.
The finding prompted charges that the government has bungled
in regulating the huge funds. It also tainted the reputation of
Kim's government ahead of next year's presidential elections.
"The government is also responsible for failing to strictly
supervise" the funds, Kim said during an interview with the
national MBC-TV Saturday.
Kim promised to punish those who will be found responsible for
the failure. He also vowed to confiscate the hidden properties of
corrupt businessmen and punish bank executives who failed to
prevent those businessmen from embezzling company funds.
"The biggest blame should go to those business owners who
stole properties for their personal sake although their companies
collapsed," Kim said.
"The government will collect the money by holding them
accountable in both criminal and civil court procedures."
After a nine-month investigation, the Board of Audit and
Inspection asked prosecutors on Thursday to file criminal charges
against 44 businessmen and former bank executives.
It ordered many others to face discipline after coughing up
pocketed funds. The names of those executives and their companies
weren't revealed.
When the Asian financial crisis engulfed South Korea, one of
the first to suffer was its overstretched banking sector, saddled
with mounds of bad loans incurred by thousands of companies that
collapsed.
The government rushed to rescue the banks with funds,
virtually nationalizing them.
The bailout funds helped those banks afloat. But those banks
continued lending to Hyundai and other troubled conglomerates, or
chaebol, despite the country's financial woes being blamed
largely on big businesses' reckless expansion in the past.
The lending policy raised questions about the credibility of
the government, which has promised to end the past practice of
showering favors on the nation's family-controlled conglomerates
and liquidate any company whose debts exceed equity.
Government auditors began an investigation after political
opposition and activist groups charged that some of the bailout
funds were wasted because bankrupt businessmen were embezzling
company funds.