Seoul mulls bankruptcy system for local gov’ts

2014-01-26 11:00

Seoul mulls bankruptcy system for local gov’ts

South Korea is considering introducing a bankruptcy system for highly indebted local administrations to make them more responsible for fiscal soundness, the home affairs ministry said Sunday.
Under the envisioned system, local administrations may be declared bankrupt when they are unable to pay back matured debts for 30 days or more, according to the Ministry of Security and Public Administration.
“The ministry began a study on introducing a bankruptcy system so that local governments will take greater responsibility for their finances,” a ministry official said.
The planned system is designed to enable local governments saddled with debt to recover their financial health and normally provide administrative services, he added.
But it is still undecided whether the central government will declare bankruptcy for financially troubled municipalities or allow local administrations to apply for insolvency, the official said.
In his New Year’s press conference, Hwang Woo-year, the chief of the ruling Saenuri Party, said the party may weigh the introduction of such a system as part of efforts to make local governments more financially sound.
However, experts said the ministry’s plan may face strong opposition because it could undermine the autonomy of local governments, the backbone of home rule. (Yonhap)

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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