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Kuros
Joined: 27 Apr 2004
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 Posted: Mon Nov 28, 2005 3:03 am Post subject: Korea's Dwindling Foreign Investment |
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Buyout Backlash
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| When Texas-based Newbridge sold a revitalized Korea First to Standard Chartered Bank earlier this year for $1.6 billion, there was a public uproar. Koreans objected not only to Newbridge's $1 billion profit, but also to the fact that the company would pay little in capital-gains tax to the state. More outrage was sparked by the revelation that Lone Star Fund, also from Texas, would realize more than $2 billion in profit on the planned sale of its stake in Korean Exchange Bank. |
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| The country's GDP growth, under President Roh Moo Hyun, has been modest for two years, and foreign direct investment has been dwindling—from $15 billion in 1999 to $6.5 billion in 2003. |
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| Indeed, many analysts credit foreign firms—both private-equity groups and long-term investors—with revitalizing the Korean corporate sector. General Motors has significantly improved troubled Daewoo Motors, and Renault has revived once debt-laden Samsung Motors. Outsiders, who own most major banks in South Korea now, have greatly strengthened the banking system. |
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| Whereas Seoul once took a loose approach to corporate-tax enforcement, partly to help attract capital, last month authorities imposed a total of $210 million in penalties against five U.S. firms for tax violations. Lone Star, which had made more than $250 million from an investment in a landmark tower in Seoul, was slapped with $70 million in penalties, and four of its former executives face charges of tax evasion. |
I'm wondering what everyone thinks about this article. I'm not about to jump on this 'Korea is ungrateful' bandwagon when it seems quite possible that foreign firms are hauling real bank out of the country. At the same time, foreign investment is dwindling quickly and that doesn't look good. |
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Ya-ta Boy
Joined: 16 Jan 2003
Location: Established in 1994
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| Posted: Mon Nov 28, 2005 7:37 am Post subject: |
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With the nuclear crisis still on-going after 3 years and SK increasingly buddying up to China, would you stick a few spare billion here?
(Buddying up to China = what happened to the parasites in the kimchi scandal? It disappeared in a few days, while they are still squealing about importing rice after 10 years. China can be forgiven anything, including fighting in the Korean War. The West, the US in particular can be forgiven nothing, including funding SK's economic development.) |
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