Korean Banks Hit Hard by Shipbuilding Woes

first_imgzoom After South Korea launched a KRW 11 trillion (USD 9.5 billion) worth fund for state-run banks, the country’s lenders could need more help to absorb the enormous shipbuilding losses, Bloomberg reported.According to data provided by Bloomberg, ten of South Korea’s shipbuilders have together accumulated a debt of some USD 38.2 billion.As the country’s major shipbuilding and shipping companies embark on restructuring, the banks are forced to push the maturity of a number of unprofitable loans.The banks targeted by South Korea’s fund, which is expected to be operational by end of 2017, are Korea Development Bank (KDB) and the Export-Import Bank of Korea (KEXIM).However, the shipbuilders might not be the only ones to blame for the situation, as the country’s Board of Audit and Inspection yesterday released a report saying that Korea Development Bank and KEXIM also played a role in increasing the debts, the Korea Economic Daily reported.Namely, KDB, the main creditor of the financially troubled Daewoo Shipbuilding & Marine Engineering (DSME), reportedly failed to conduct proper inspections on DSME’s management, which contributed to an accounting fraud in the amount of some KRW 1.5 trillion (USD 1.28 billion) during the 2013-2014 period.Furthermore, KEXIM permitted Sungdong Shipbuilding to sign agreements on below-cost orders, crossing the legal limit, thereby delaying the company’s financial recovery.The country’s Big Three shipbuilders, Hyundai Heavy Industries (HHI), Daewoo Shipbuilding and Marine Engineering and Samsung Heavy Industries (SHI), have all launched self-rescue plans that include massive asset sales and workforce cuts.As a result, the government expects a 30 percent workforce drop in the shipbuilding industry by 2018 from 2015 once the restructuring process is completed. In addition, it is anticipated that the country’s shipbuilding capacity will be reduced by 20 percent.World Maritime News Stafflast_img read more

UN marks International Day of Tolerance

In societies characterized by diversity one of the most important challenges has been how to get rid of intolerance, the Secretary-General says in remarks released in advance of the International Day, which is observed each year on 16 November.Tolerance “is an active and positive attitude, inspired by a recognition of and respect for the rights and freedoms of others,” Mr. Annan says. “It means that concern for others must prevail over callousness and contempt and that an effort to know the ‘other’ takes the place of ignorance, blind prejudice and discrimination.”No modern society could be built or could flourish by cultivating intolerance, he adds.In his remarks, the Director-General of the Paris-based UN Educational, Scientific and Cultural Organization (UNESCO), Koïchiro Matsuura, suggests some questions people might ask themselves on “this international day of collective reflection.””How can we accept, without being overcome by a profound sense of scepticism, that all values and truths are relative and that the appeal of universality is only an illusion?” he says. “Must we, then, in the name of the tolerance advocated by democratic societies, give up our search for the truth and agree to tolerate everything, even the intolerable?”Through dialogue the world needed to create a shared perception of things and events in order to resolve its tensions in the new century, Mr. Matsuura says.”It is on the basis of such a ‘reasonable consensus,’ favouring open societies and their basic values of democracy and respect for human rights, that we can no doubt find a way out of a highly destructive relativism,” he says.”May this international day inspire each of us to open the channels of this dialogue, in which nothing less than the future of our humanity is at stake,” he adds. read more