Korea Credit Guarantee Fund to review ending joint guarantees in restart support

Korea Credit Guarantee Fund chairman Kang Seung-jun (강승준) said on October 15 that he would actively review ending joint-guarantee requirements remaining in support for business restarts. He was responding at a parliamentary audit to People Power Party lawmaker Cho Jung-hun (조정훈), who called for changes to obligations imposed on company representatives. The audit took place at the Busan International Finance Center, Asia Economy reported. [ 1 , 2 , 3 ]

Kang said the fund had abolished joint guarantees for new guarantees but continued to require them in limited support for renewed attempts and business restarts. Yonhap reported that he also raised cases in which companies closed immediately after obtaining exemptions from existing joint-guarantee obligations. He said the fund would consider easing screening while preparing measures to address those cases. [ 1 , 3 ]

Cho also criticised Korea Asset Management Corporation, known as Kamco, for filing lawsuits before limitation periods expired in order to keep old joint-guarantee debts enforceable. Kamco president Jeong Jeong-hun (정정훈) agreed with the need for improvements. He said the corporation was managing claims acquired from public institutions, including the guarantee fund, rather than creating new joint guarantees. Newsis reported that he said the relevant system had been comprehensively revised the previous year. [ 1 , 2 ]

Yonhap reported that Kang would also examine possible improvements concerning existing guarantees for primary collateralised bond obligations, or P-CBOs. He said joint guarantees had been completely abolished for new securitisation guarantees, while refinancing of existing guarantees involved assessments such as responsible management. The supplied reports described reviews and possible changes rather than an announced date for abolishing the remaining obligations. [ 3 ]