Advance Notice of Enforcement Decree Amendment of Korea Development Bank Act for Establishing the Industrial Stabilization Fund

[Asia Economy Reporter Kangwook Cho] The Financial Services Commission announced on the 6th that it has given prior legislative notice of the amendment to the Enforcement Decree of the Korea Development Bank Act for the establishment of the Period Industry Stabilization Fund.

Earlier, on the 22nd of last month, the government announced a plan to establish and operate a 40 trillion won Period Industry Stabilization Fund as part of the "Corporate Stabilization Support Measures to Protect Jobs" at the 5th Emergency Economic Measures Meeting. Subsequently, on the 29th of the same month, the amendment to the Korea Development Bank Act for the establishment of the Period Industry Stabilization Fund passed the National Assembly and was promulgated on the 1st.

According to this amendment, the Korea Development Bank Act specifies industries that have a significant impact on the national economy, employment stability, and national security, such as defense industry companies and foreign investment-restricted sectors, to be detailed by enforcement decree. Accordingly, seven industries are primarily regulated: ① Air transportation, air transportation support services, ② Maritime transportation, port and other maritime terminal operations, water cargo handling, ③ Other machinery and equipment manufacturing, ④ Automobile and trailer manufacturing, ⑤ Ship and boat building, ⑥ Electric power industry, ⑦ Telecommunications industry. Additionally, if there is a recognized need for financial support in other industries, the Financial Services Commission may add them upon request from the head of the relevant ministry (in prior consultation with the Minister of Strategy and Finance).

Regarding the issuance method of bonds and subscription for Period Industry Stabilization Fund bonds, the procedures for issuing industrial finance bonds under the Korea Development Bank Act will be applied.

The exceptional reasons for exercising voting rights of the fund delegated by law are limited to two cases to preserve the fund’s assets: ① When resolutions concerning matters that may significantly affect the value of stocks, such as capital reduction or issuance of shares below par value, are made, and ② When a company receiving financial support applies for restructuring procedures and exercising voting rights is necessary to preserve the assets of the Period Industry Stabilization Fund.

The seven members of the Fund Management Deliberation Committee will be composed of individuals recommended by relevant organizations, including the National Assembly’s relevant standing committee, the Minister of Strategy and Finance, the Minister of Trade, Industry and Energy, the Minister of Employment and Labor, the Chairman of the Financial Services Commission, and the President of the Korea Development Bank. The chairman of the Fund Management Deliberation Committee will be elected among the members by mutual vote. The term of office for members is two years, with the possibility of reappointment.

This amendment to the enforcement decree will be revised after prior legislative notice until the 8th, followed by review by the Office for Government Policy Coordination and approval by the Cabinet meeting.

The Financial Services Commission plans to promptly proceed with follow-up measures such as the formation of the Fund Management Deliberation Committee as soon as the amendment to the enforcement decree is finalized to ensure swift fund disbursement.

This content was produced with the assistance of AI translation services.