Sungsoo Lee Hanwha President "Urgent Need for Defense Export Financial Support"...Democrats "To Handle in Regular National Assembly"

Democrats Hold 'Global Corporate Competitiveness Enhancement Meeting' Seminar
Call for Increased Government Financial Support to Strengthen Defense Industry Competitiveness

Hanwha Group President Lee Sung-soo emphasized on the 5th that government financial support is urgently needed for defense export companies and called for institutionalization.

At the seminar titled "Hanwha Group's Innovative Challenge to the Defense Industry, Space, Aviation, and Energy Industries," hosted by the Democratic Party of Korea's 'Global Corporate Competitiveness Enhancement Group,' President Lee stated, "Advanced countries such as the United States, France, and Germany provide essential financial support when exporting weapons," adding, "As we have recently increased exports of defense products, the related system is urgently needed."

He explained, "Because the scale of exports in the defense industry is enormous, financial support is essential," and "Since the importing countries also consider financial support as a given, government financial support is necessary to facilitate smooth exports."

Last year, Hanwha Group signed a defense export contract worth 20 trillion won with Poland. While the first contract worth 6 trillion won is underway, Poland is requesting financial support for the second batch worth 16 trillion won.

President Lee said, "Since advanced countries generally provide (financial support), the Polish government considers it very natural," and "We are currently constrained due to insufficient related export-import bank (capital) limits and systems." He added, "If delayed further, this deal could be taken away by American companies," and appealed, "Poland is approaching its general election, so much effort is needed before the election, but financial support constraints leave companies with little they can do."

To expand export financing to Poland, it is necessary to increase bank capital or lift credit extension regulations limited to 40% of equity capital. However, easing regulations could cause controversy over preferential treatment for private companies, and the amendment to the Export-Import Bank Act to increase the legal capital limit (15 trillion won) is currently pending in the National Assembly.

In response, Democratic Party lawmaker Jung Sung-ho said, "The amendment to the Commercial Act related to this will be discussed in the regular session of the National Assembly."

On the 5th, at the discussion hosted by the Democratic Party of Korea's Global Corporate Competitiveness Enhancement Parliamentary Group with Hanwha Group at the National Assembly, floor leader Hong Ik-pyo and President Lee Sung-soo, along with other attendees, are taking a commemorative photo.
[Photo by Yonhap News]

On the same day, President Lee also emphasized the need for an innovative compensation system as competition for securing talent among countries intensifies. He explained, "Hanwha is expanding and transforming its business portfolio based on the space, aviation, defense, energy, and shipbuilding sectors," adding, "The ability to quickly adapt to changes is thanks to the major shareholder's swift decision-making and bold execution."

He stressed the urgent need to establish a long-term compensation system because securing key talent, which is a major foundation for future businesses, is critical. In fact, Hanwha Group introduced the Restricted Stock Unit (RSU) system about three years ago, the first among domestic large corporations. Unlike stock options, RSUs are a compensation system where employees receive shares only after meeting certain conditions such as tenure and sales performance.

However, President Lee also urged for institutional improvements, saying, "It is true that there are legal grounds and various tax issues in Korea when introducing RSUs and similar systems. If legal grounds are provided, we will operate well within the framework of the law."

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