Eun Sung-soo Hints at Possible Support for Asiana Aircraft Fund...Apologizes Over Private Equity Controversy

"Deal Breaks and Application Meets Requirements"
Announced at the National Assembly's Political Affairs Committee Full Meeting on the 29th

Eun Sung-soo, Chairman of the Financial Services Commission, is reviewing documents at the full meeting of the Political Affairs Committee held at the National Assembly in Yeouido, Seoul, on the morning of the 29th. (Photo by Yonhap News)

[Asia Economy Reporter Kim Hyo-jin] Eun Sung-soo, Chairman of the Financial Services Commission, expressed that support through the Industrial Stabilization Fund (ISF) would be possible if the sale of Asiana Airlines falls through. He also apologized regarding the recent incidents of private equity fund investment damages.

On the 29th, during the plenary session of the Political Affairs Committee held at the National Assembly in Yeouido, Seoul, when Oh Ki-hyung, a member of the Democratic Party of Korea, inquired about the deadlock in the sale of Asiana Airlines, Chairman Eun said, "If the deal with HDC Hyundai Development Company breaks down and Asiana Airlines applies for the ISF, I believe the eligibility criteria would be sufficiently met."

However, Chairman Eun added, "The Fund Management Deliberation Committee will make the final decision."

When asked if there is an alternative if the acquisition deal for Asiana Airlines does not materialize, he responded, "I understand that Asiana Airlines and the creditors are also considering the possibility that the acquisition may not succeed."

Chairman Eun explained, "Hyundai Development Company insists on conducting due diligence again, and the creditors have asked for an answer because they cannot allow the due diligence to be prolonged indefinitely."

In response to a question from Yoon Jae-ok of the United Future Party about whether nationalization of Asiana Airlines is being considered, Chairman Eun said, "If the acquisition fails and liquidity is immediately insufficient, the Industrial Stabilization Fund, which is government money, would eventually provide support. Reporters seem to have described this as nationalization," adding, "In any case, such a possibility could be included."

"Private Equity Funds, Apologies as Financial Authorities' Responsible Officials"
Financial Supervisory Service Chief Also "Feels Heavy Responsibility"

In his opening remarks, Chairman Eun stated, "The private equity fund market has rapidly grown in scale, but accumulated problems have recently surfaced all at once. As the person responsible in the financial authorities, I sincerely apologize for the investor damages caused by private equity funds."

Yoon Seok-heon, Governor of the Financial Supervisory Service, who attended alongside Chairman Eun, said, "I believe the recent series of private equity fund incidents mainly stem from illegal activities by some private equity operators and the failure of autonomous market surveillance functions. As the head of the Financial Supervisory Service responsible for related supervision and inspection, I feel a heavy sense of responsibility."

Chairman Eun and Governor Yoon pledged to strengthen regulations on the sales and management stages of high-risk financial products, enhance supervision and inspection, and improve related systems. The financial authorities have launched a full inspection of 10,304 private equity funds (as of last May) through sales companies, asset managers, custodians, and administrative service companies, scheduled to be completed by September.

Additionally, centered on the Financial Supervisory Service, a dedicated inspection organization involving related agencies will conduct on-site inspections of all private equity operators (233 as of last May) over three years until 2023.

Yoon Seok-heon, Governor of the Financial Supervisory Service, is receiving a report from an official at the full meeting of the Political Affairs Committee held at the National Assembly in Yeouido, Seoul, on the morning of the 29th. (Photo by Yonhap News)

"Digital Finance, Will Strive for Balance Between Innovation and Security"

Meanwhile, Chairman Eun stated regarding the accelerating 'digital financial innovation' driven by big tech companies' full-scale entry into finance and the activation of financial data trading, "During the implementation process, we will not neglect efforts to balance innovation and security to safely protect customers' personal information and assets."

To this end, the financial authorities are promoting measures such as mandatory external deposit and trust of prepaid funds, strengthening financial companies' responsibility for unauthorized transactions, mandatory external clearing of payment transactions by big tech companies, and establishing supervisory grounds for cloud service providers. The financial authorities plan to pursue amendments to the Electronic Financial Transactions Act concerning these matters in the second half of this year.

Regarding financial support for small business owners and SMEs severely affected by the novel coronavirus disease (COVID-19), an extension of loan maturity measures, currently set to expire on September 30, is being considered. Chairman Eun mentioned this during a government questioning session at the National Assembly on the 23rd, stating, "We are gathering opinions to extend loan maturity extensions and interest repayment deferrals."

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