Hanbo Construction declared bankrupt

Hanbo Construction declared bankrupt

SEOUL (AFP): The construction arm of South Korea's failed
Hanbo Group was officially declared bankrupt yesterday, a major
creditor bank said.

Korea First Bank deputy director Lee Ha-Jung told AFP that
Hanbo Engineering and Construction Co. Ltd. had defaulted for the
second time on promissory notes owed to it worth 6.5 billion won
(US$7.3 million) by the close of business yesterday.

Under South Korean law a firm becomes officially bankrupt
after the second default. The first default was Thursday.

The bankruptcy brought to five the number of key subsidiaries
of Hanbo, including its main steel-making flagship, to go out of
business since the Hanbo Group crumbled in January under $5.7
billion of debt.

The collapse of the country's 14th largest conglomerate
triggered a political uproar when prosecutors found it had
obtained loans without collateral by bribing top figures in the
government.

A former home minister, four MPs and two bankers were jailed
and are now under trial along with the group's founder, Chung
Tae-Soo and one of his executives.

The opposition has also accused a son of President Kim Young-
Sam of being at the core of the scandal, although he was
officially cleared by prosecutors.

Hanbo Engineering and Construction Co. is engaged in four
major overseas contracts worth a total of $474 million -- a
military barracks and a shopping and condominium complex in
Indonesia, a highway project in Pakistan and a multi-purpose dam
in the Philippines.