Shin Je-yoon, chairman of the Financial Services Commission, said “I will make sure Tong Yang Group’s majority shareholders take responsibility for the recent turmoil of the group.”

FSC chief: Major stakeholders are to blame for Tong Yang debacle

Lee Jin-myung, Park Seung-chul

2013.10.10 17:51:18

Shin Je-yoon, chairman of the Financial Services Commission, said “I will make sure Tong Yang Group’s majority shareholders take responsibility for the recent turmoil of the group.” “The consistent principle underlying corporate restructuring has been that majority stakeholders take responsibility and protect innocent victims,” chairman Shin told reporters of Maeil Business Newspaper Thursday. The chief of the regulator added “I am also willing to meet with individual investors who bought commercial paper issued by Tong Yang Group’s subsidiaries.” His comment refers to the nationwide defaults on credit card payments in 2004 and the debacle regarding the LIG Group’s commercial paper, in which majority stakeholders were held accountable. As for some other cash-strapped conglomerates, chairman Shin said “the government executes restructuring in accordance with capitalism and rule of law.” Therefore, “the government cannot determine either to stifle or keep a company that still runs a business beforehand.” He said “corporate restructuring is entirely left to the hands of the market and creditors,” and in this regard, “Tong Yang Group’s fate has been determined by the market.” Prior to his comment, chairman Shin and Choi Soo-hyun, governor of the Financial Supervisory Service (FSS), discussed measures to deal with the embattled Tong Yang Group with Chung Hong-won, prime minister, and Hyun Oh-seok, deputy prime minister and finance minister Tuesday following a meeting of cabinet members. The FSS has decided to thoroughly examine Hyun Jae-hyun, chairman of Tong Yang Group, and his family regarding the insolvency of the Group’s affiliates, and track down his hidden assets, with the help of the investigative authorities when needed.

The Tongyang Group fiasco that flared during the Chuseok holiday last month continues to spiral downward with reports of damage piling up

Market assesses Tongyang fallout

Oct 10,2013

The Tongyang Group fiasco that flared during the Chuseok holiday last month continues to spiral downward with reports of damage piling up. With financial authorities now turning the case over to the prosecutor’s office, the question in the market is how much impact the Tongyang crisis will have on the retail corporate bond market. Some market experts say retail investors will be hesitant to invest in corporate bonds and commercial paper, especially those issued from companies with low credit ratings. As a result, such companies will struggle more to secure capital inflows, which have been dwindling since late last year.

Read more of this post

8 Korean cable makers fined for price-fixing

2013-10-10 17:34

8 cable makers fined for price-fixing

By Kim Tae-jong
The nation’s anti-trust watchdog said Thursday it has imposed a combined fine of 6.2 billion won on eight major cable makers for price-fixing and decided to refer the case to the prosecution. The Fair Trade Commission (FTC) said eight cable manufacturers, including LS, LS Cable & System and Taihan Electric Wire, colluded to supply cables used in nuclear reactors at high prices. Read more of this post

Low loan margins are breaking the Korean banks

Low loan margins are breaking the banks

Oct 11,2013

Korean banks may close 2013 with their lowest profitability in four years as the rate cuts from the central bank, which meant to stimulate Asia’s fourth-biggest economy, squeeze loan margins further. Three rate decreases by the Bank of Korea since July 2012 have left borrowing costs near a three-year low and average net interest margin for lenders, including Shinhan Financial Group, at the lowest since 2009, according to Financial Supervisory Service data.

Read more of this post

The world of government officials in Korea is so closed that lobbying and corruption are becoming rampant

9 of 10 officials get plush private-sector landings

The most popular destination for the former officials was Samsung.

Oct 11,2013

BY SONG SU-HYUN, KIM KYUNG-HEE [ssh@joongang.co.kr]

The world of government officials in Korea is so closed that lobbying and corruption are becoming rampant, according to a lawmaker’s analysis that found about 93 percent of 1,362 high-ranking former government officials have been employed by the private sector since 2009. In Korea, when retired public servants want to work, they have to get approval from the Government Public Ethics Committee. Read more of this post

The gated globe: Governments are putting up impediments to globalisation. It is time for a fresh wave of liberalisation

The gated globe: Governments are putting up impediments to globalisation. It is time for a fresh wave of liberalisation

Oct 12th 2013 |From the print edition

IMAGINE discovering a one-shot boost for the world’s economy. It would revitalise firms, increasing sales and productivity. It would ease access to credit and it would increase the range and quality of goods in the shops while keeping their prices low. What economic energy drink can possibly deliver all these benefits? Globalisation can. Yet in recent years the trend to greater openness has been replaced by an enthusiasm for building barriers—mostly to the world’s detriment. The worst did not happen… Read more of this post

Defining class in Mexico: Politicians and statisticians hunt for the middle class

Defining class in Mexico: Politicians and statisticians hunt for the middle class

Oct 12th 2013 | MEXICO CITY |From the print edition

IN THE hallowed name of the middle class, Mexico’s politicians have been doing a lot of huffing and puffing lately. The source of their indignation is the president’s plan to raise income tax on annual salaries over 500,000 pesos ($38,000) and impose value-added tax on private schooling and mortgage payments. That, the people’s representatives complain, would beat the stuffing out of ordinary, hard-working families, so they plan to spare them the tax on schooling and housing.

Read more of this post

M&A in China are expected to enter a new stage of development with regulations implemented October 8 aimed at streamlining approval procedures

10.10.2013 17:20

New M&A Rules Bring Cautious Optimism

Industry analysts hope to see pickup in speed for regulatory approvals but raise concerns over certain preconditions for qualified companies

By staff reporters Liu Ran and Zheng Fei

(Beijing) – Mergers & acquisitions in the country are expected to enter a new stage of development with regulations implemented October 8 aimed at streamlining approval procedures. The policy allows qualified listed companies planning an M&A to skip a long list of compliance checks to receive fast-track approval from the China Securities Regulatory Commission (CSRC). Read more of this post

At Risk: Currency Privilege of the Dollar; The United States has the credibility to borrow from foreign investors in a currency it can print and under laws it can change, but a default could jeopardize that

October 10, 2013

At Risk: Currency Privilege of the Dollar

By FLOYD NORRIS

Not all government debt is created equal. Some governments get a much better deal than others, and no one gets a better deal than the United States. The United States borrows in its own currency, and it borrows at extremely low interest rates. It also borrows under its own laws, an often overlooked advantage. Such a situation makes default — or at least involuntary default — impossible because the government can print dollars if need be. The value of the dollars it repays may be less than the value of the dollars it borrows, but that is a risk the lenders accept. The United States could change its laws, but it is trusted not to abuse that right. Read more of this post

Wal-Mart’s Other Path to Indian Consumers; Wal-Mart’s decision to shelve its retail ambitions in India doesn’t mean it can’t tap into that country’s burgeoning consumer market

October 10, 2013, 11:46 a.m. ET

Wal-Mart’s Other Path to Indian Consumers

ABHEEK BHATTACHARYA

Wal-Mart Stores‘ WMT +2.45% problems in India have so far been a byword for the emerging economy’s perils. But to some extent, its latest move in India suggests one area of promise. The world’s largest retailer by sales became Indian politicians’ favorite punching bag two years ago, when New Delhi decided to keep foreign retailers away to protect mom-and-pop stores. Even after foreigners were let into this sector last year, the government imposed protectionist restrictions on sourcing goods. Read more of this post

India markets regulator looks to revive REITs, issues draft guidelines

India markets regulator looks to revive REITs, issues draft guidelines

Thu, Oct 10 2013

(Adds details on proposed rules)

MUMBAI, Oct 10 (Reuters) – India’s capital markets regulator on Thursday issued draft guidelines to set up real estate investment trusts (REITs) in the country, reviving an effort it had put on hold in 2008 during the global financial crisis. REITs are tax-efficient listed entities that mainly invest in income-producing real estate assets from which most of the earnings are distributed to their shareholders. Read more of this post

Squandering America’s Debt Advantage; Even if the Debt-Ceiling Crisis Is Resolved, Washington Could Have Tarnished One of Its Most Valuable Assets

Updated October 10, 2013, 8:14 p.m. ET

Squandering America’s Debt Advantage

Even if the Debt-Ceiling Crisis Is Resolved, Washington Could Have Tarnished One of Its Most Valuable Assets

SPENCER JAKAB

Testifying to Congress on Thursday about the debt ceiling, Treasury Secretary Jack Lew stressed that American politicians throughout history “have universally understood the importance of protecting one of our most precious assets, the full faith and credit of the United States.” Despite recent theatrics, it is a safe bet that most of today’s political leaders understand it, too. On Thursday, Washington appeared closer to a resolution, although that remained uncertain, to the political crisis that threatened to force the U.S. to default on its debt. Read more of this post

Sotheby’s, Christie’s Square Off in Test of Strategies; Christie’s Seeks Less Wealthy Customers, While Sotheby’s Targets Millionaires

Sotheby’s, Christie’s Square Off in Test of Strategies

Christie’s Seeks Less Wealthy Customers, While Sotheby’s Targets Millionaires

KELLY CROW, SARA GERMANO and DAVID BENOIT

Updated Oct. 10, 2013 7:51 p.m. ET

For two centuries, the world’s chief auction houses— Sotheby’s BID +1.75% and Christie’s International—have shined a spotlight on everything from pricey vases to Van Goghs. But now, it’s the houses’ own strategies that are getting a closer look. An assault on Sotheby’s management by its largest shareholder, hedge fund Third Point LLC, has called attention to the sharp differences in how the two longtime rivals have gone about boosting sales and their bottom lines. While Christie’s is branching out to appeal to less wealthy people who may prefer to bid for art over the Internet, Sotheby’s has refocused on catering to the millionaires who make up its core customer base. Read more of this post

Top global hedge fund Brevan Howard takes emerging markets hit

Top global hedge fund Brevan Howard takes emerging markets hit

6:12pm EDT

By Matthew Goldstein, Jennifer Ablan and Katya Wachtel

NEW YORK (Reuters) – Brevan Howard Asset Management LLP, one of the world’s largest hedge fund firms with $40 billion in assets, is posting lackluster performance in its flagship fund and heavy losses in its emerging market portfolio. Two people familiar with the numbers said on Thursday that the flagship, the roughly $28 billion Brevan Howard Master Fund, is virtually unchanged for the year as of October 4. The portfolio, the firm’s largest and making macro economic bets, was up about 3.8 percent as of the end of June but has been declining since. Read more of this post

Costs for European chocolatiers have jumped almost a third in the past year because of a surge in key ingredient prices, raising prospects of a further squeeze in margins

Last updated: October 10, 2013 10:56 pm

Chocolatiers face bitter Christmas as cocoa surges

By Emiko Terazono in London

Costs for European chocolatiers have jumped almost a third in the past year because of a surge in key ingredient prices, raising prospects of a further squeeze in margins in a supply scramble ahead of Christmas, Valentine’s day and Easter. Cocoa butter, which provides the melting quality in chocolate, surged almost 70 per cent in the year to August, while milk powder jumped 50 per cent, leading to a 31 per cent rise in the cost of making a bar of milk chocolate, according to commodity data specialists Mintec. Read more of this post