Korea development bank fined for improper support for affiliate
- North Korea
- 07/24/2008
Korea Development Bank was fined 15.4 billion won ($15.1 million) for acquiring debts from its finance leasing affiliate at below market rates to prevent it from collapsing, the Fair Trade Commission said.
State-run Korea Development Bank bought KDB Capital Corp.‘s debts worth 350 billion won between 2004 and 2005 at an interest rate significantly lower than the market rate, the agency said today in an e-mailed statement. The move resulted in “excessive economic benefits” to KDB Capital, it said.
“Preventing the collapse of an insolvent unit through improper support is an act that significantly distorts market functions,” the agency said in the statement. Korea Development Bank will take the case to the court, spokesman Sung Joo Yung said by telephone in Seoul.
Separately, Mirae Asset Investments Co. was warned for giving higher stock-trading fees to its brokerage affiliate. Mirae Asset Securities Co. was paid at a higher rate than local competitors between June and November in 2006, but later received similar fees, the agency said.
