Most of Seoul Metro's long-term overdue receivables of 61.7 billion KRW are unrecoverable... Is there a fundamental solution?

Seoul Metro's 951 Long-Term Overdue Claims Worth 61.7 Billion Won Reveal Lack of Expertise in Debt Management... Councilor Jeong Jin-cheol: "Large-Scale Long-Term Overdue Claims Are Occurring, but Lack of Expertise Prevents Proper Management"

[Asia Economy Reporter Park Jong-il] It has been revealed that most of the long-term delinquent receivables of Seoul Metro, which recorded a deficit of over 1.1 trillion won last year, are in an unrecoverable state.

At the 303rd regular session of the Seoul Metropolitan Council’s administrative audit of Seoul Metro, Councilor Jeong Jin-cheol (The Democratic Party, Songpa 6) stated, “The financially distressed corporation has 951 cases of long-term delinquent receivables amounting to 61.7 billion won, of which 41.8 billion won, or 68%, has been written off as uncollectible following legal litigation results. Additionally, 27 cases totaling about 240 million won have passed the statute of limitations within the last five years, and the remaining receivables will soon sequentially reach the statute of limitations,” he pointed out.

He added, “This outcome occurred because the department heads and headquarters chiefs responsible for the departments generating the delinquent receivables are solely in charge of all decisions related to debt collection, bad debt provisions, and write-offs, resulting in debt management by non-experts. There is no dedicated professional management department, and the internal audit procedures regarding the appropriateness of the occurrence and post-management are insufficient. In particular, the essence of debt management is promptness, but the relevant business departments focus only on debt management and litigation themselves, and only after winning the lawsuit do they proceed with asset investigation, provisional seizure, and other debt securing procedures, which is too late,” he criticized Kim Sang-beom, President of Seoul Metro.

Councilor Jeong continued, “If necessary, internal audits regarding the occurrence circumstances and appropriateness of debt management should be conducted, and internal policies and regulations on debt management that include prompt debt securing before litigation must be established. Furthermore, evaluations of departments and employees regarding the occurrence of delinquent receivables and debt collection performance should be strengthened,” he urged.

In response, President Kim of the corporation stated, “We will carefully review the various points of criticism and suggestions and promptly proceed with improvements.”

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