Rich NKoreans bribe univerity

‘Good Friends,’ a South Korean agency to help out NK people, said on Jan 28 that there is a flurry of cases reported that the regime's most prestigious university can be bribed to enter. According to the report, Kim Il-Sung University is often accepting students, not based on academic excellence, but on the amount of money parents are willing to pay.

In its regular news letter, the agency introduced the case of a high-ranking NK official who spent more than $1,000 to send his kid to the school. He was quoted as saying “all rich people or people high up there have their children accepted to school this way.” It is also reported that university life proves to be easier for this well-off kids, who easily buy off professors or school officers to obtain better grades.

First acknowledgement of secret bank account

A former Samsung executive, who worked for Samsung Electro-Mechanics, conceded, for the first time, that one of his accounts was related to the company slush funds. During the investigation, he said “the account is the one that I don't know about and the money in it is not mine.” All other summoned Samsung executives, however, have strongly denied the existence of alleged slush-funds-related bank accounts by saying the account was opened up by themselves.

A tall order

English teachers is expected to be in high demand as the transition team unveiled its ambitious plan called 'Public English Education Completion Project Roadmap ,’ with an ultimate purpose of turning Korea into ‘the best English-speaking country in Asia’ by 2010.

According to the plan, English classes will be taught only in English by 2010, and the number of newly hired teachers will amount to 23,000, an grand plan that is estimated to cost the government W1.7 trillion.

In an effort to reduce private education spending, a state-run English proficiency test will be produced by next year to replace TOEIC or TOFLE from 2013 as a standard measure for student’s English levels.

Just before opening a public hearing attended by education experts, teachers, and parents , committee head Lee Kyung-sook said “the plan is aimed at enabling high school graduates to communicate in English without private education, and capitualte Korea into the best English-speaking Asian country in ten years' time.” “I am well aware of a reality where people spend more than W1 m for sending their kids to English kindergarten…we can greatly reduce private tutoring spending by starting ‘live English education’ which makes students speak English on a daily basis from elementary schools," said the head.

But how to supply sufficient numbers of capable English teachers in such a short period of time remains a big stumbling blcok in the road to the "best Enlgish speaking country in Asia." And many people remain skeptical that the plan can achieve its intended goals, not least becuase various solutions have failed to educate students even to barely communicate in that language, let alone being fluent. In reality, even English teachers who spent their whole life in teaching it are often found to be in lack of a decent level of communication ability.

Incoming government’s plan will be completed and publicly announced by next week.

NK opened an online shopping site

South Korea's Chosun Ilbo reported on Jan 28 that North Korea opened an internet shopping site which sells about 100 kinds of products including agricultural products, machines, building materials, stamps, movie, medicine, and computer software. On the site is the announcement that the payment can be done by credit card.

The North has recently finished establishing the online site in hands with a Chinese company, which lends an internet server to the communist regime, reports the paper. The site is not accessible from Korea due to National Security Laws under which ordinary citizens are not allowed to visit any North Korean sites.

Samsung destroyed evidence of slush funds

The special investigation team said they have found out systematic efforts by the company to destroy evidence related to slush funds when they raided Samsung Fire and Marine Insurance Co. on Jan 25. In the shredder were full of bits of destroyed documents and on 22nd floor were there traces of hasty attempts of removing secret safe.

Global Internet firms struggling in Korea

A flurry of global IT companies is making ambitious inroads into Korea, with recently Second Life and YouTube launching services here. It remains, however, to be seen whether their success can be repeated here.

Google, the world-biggest search site, has been struggling with less than 4 per cent of domestic search market share and trailing far behind in Korea. Second Life is already embroiled in a controversy that a possible cyber-sex using a ‘pose ball’ might cause serious problems with young users. For YouTube, copyright infringement and close monitoring of obscene video clips are the big challenges for it to take off here.

Han Seung-soo designated as PM

Han Seung-s00, UN special envoy on climate change and a long-time politcian and diplomat, was appointed as Prime Minister for the incoming LMB government.

He said “I appreciate the appointment, and I will do my best to create a ‘global Korea.’ I hope people’s encouragement and support for the mission.”

Lone Star chairman left Korea

John Grayken, the chairman of Lone Star, left Seoul this morning after going through 10-day investigation by prosecutors.

“I totally cooperated with the prosecutors’ investigation and will continue to do so if necessary" he said just before leaving at the airport. “I hope my explanation was helpful in this investigation and wish it is now proven that Lone Star worked as an investor with good faith in Korea,” he said.

Meanwhile the prosecution decided not to indict the chairman regarding the alleged misdeeds of the company.

NTS set to improve taxation for foreingers

National Tax Service is to improve taxation service for foreign companies. The head of NTS said today “in an environment where the country should have fierce competition with the world to entice foreign investment, taxation should not work as a stumbling block.”

The national agency will clarify any ambiguity in the tax law, improve service, and minimize taxation interruption for foreign companies which are paying taxes sincerely. It will, however, firmly deal with any attempt to avoid paying taxes using Aggressive Tax Planning, in consistent with international standard.

Ombudsmen will be empowered

Yoon Jin-sik, the head of a task force handling attracting foreign investment of the presidential transition team, said the new government will revise the current ‘Ombudsmen’ system which was set up in 1999 aimed at help out foreign investors working in Korea, to empower it with more legal authority.

There are seven ombudsmen currently working to resolve various problems facing foreign investors, and the number is likely to increase so that one ombudsman can handle about 100 companies, not 400 ones they are currently dealing with.

Experts against the plan to abolish the unification ministry

One hundred and forty experts on North Korea issued a statement on Jan. 24 against the incoming government’s plan to close down the unification ministry, saying “the plan do not give consideration to the characteristics and consistency of inter-Korean relations, and thus it should be withdrawn.” “To view inter-Korean relations only in light of national interests and diplomacy could cause a serious problem,” read the statement.

Incoming government set to ease financial regulations

The transition team is set to ease regulations regarding the setting-up of PEF(Private Equity Fund), bring forward the introduction of hedge fund to as early as this year, and make it easier for foreign banks to open a branch in Korea. Under the current law, a foreign bank should be capitalized at more than W100bn to establish a branch in Korea, which excludes capitals from the headquarters.

Hooray! Female-only subway

‘Female-only compartments’ in subways will available all day in subway lines 6 and 7 from Jan 30 as a pilot project, says Seoul Metropolitan Rapid Transit Corporation. Oh Se-hoon, Seoul mayor, said earlier this year, “female-only compartments will be provided so that working women can use public transportation in a safe and comfortable way.
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”What a brilliant idea! Seoul governemnt has launched a pilot project of 'female-only-compartment' in subways. As an active public transportaiton user myself, I often feel very uncomfortable whenever using densely-packed subways in the mornings and evenings.

It is not rare at all to witness a fight between a young woman and a man, often old, because a woman becomes easily irritated with the unavoidable phisical contact with an unknown man, and often suspects the guy to stand too close to her with some sleazy purposes.

Hope the plan to be introduced in subway line 1 and 2, the busiest lines, and my most frequently used lines~

Pension fund to be input earlier into the stock market

Financial authorities are determined to act aggressively against a volatile stock market, by pouring state pension funds, earlier than planned, into the market in order to stave off free-falling stock prices and sooth jittery investors.

W9 trillion has been earmarked by the government as investment money for this year, but the government plans to increase the volume and advance the timing of investment.

Despite mounting pessimism about the economy, financial officials say the Korean economy is in ‘not that serious condition,’ expecting a steady economic growth and employment expansion this year.

Philips likely exits the LCD business

Japanese Nikkei newspaper quoted on Jan.23 Philips CEO as saying that the Dutch company is likely to sell off most of its shares of LG Philips LCD within this year, thus withdrawing from the LCD business. The company is holing 19.9 per cent of shares in the joint venture. The details of the sell-off have not been determined yet, says the paper.

Everland Warehouses, Secret Place to Hide Expensive Art

State prosecutors yesterday raided the warehouses of Samsung Everland, an amusement park located in Yongin, southwest of Seoul, on suspicion that expensive paintings are stored there, to confirm that there are indeed tens of thousands of local and foreign art works.

The investigators say the warehouses are equipped with state-of-the-art facilities to maintain the optimal temperature and environment for the stored pieces of arts, and will work on finding out whether those arts have been purchased with the slush funds.

Belated Apology

Samsung Heavy Industries belatedly issued a public apology on today's major newspapers. The worst-ever oil spill took place more than a month ago, but the company has been totally silent about the catastrophe, which caused two fishery farmers and one fish restaurant owner in the affect areas to kill themselves.

It should have expressed earlier its sincere apology for causing so much environmental damages and ruining the livelihood of farmers. It seems too late to turn back people's disappointment and appease grave anger it triggered in society.

New Governmnet Reveals Reform Plan

The government is to be scaled down from the current 18 ministries to 13 according to the government’s structural reform plan revealed on Jan. 16. Unification, information, Science, Maritime, and gender equality ministries will be all abolished and the post of vice prime minister will be scrapped as well. With the major government reforms, more than 6,900 civil servants will be shed as a result.

Probe into President-elect Starts

The special inquiry team has started its probe on Jan. 16 into four major allegations surrounding the president-elect including BBK’s stock prices manipulation. The team is the biggest in size among eight independent prosecutor’s teams in history, with 15 prosecutors, 40 investigators, and 50 officials. It is given as long as 40 days of inquiry that expires just two days before the inauguration day of February 25.

NIS Head Resigns over Leakage

Kim Man-bok, the head of National Intelligence Service, resigns over the leaks of the conversation between him and North Korean official Kim Yang-kun on December 18 last year.

The conversation took place in North Korea a day before the presidential election day and the leakage was done by the agency with the approval of the head to a senior member of a local press in order to explain, off-the-record, the reasons for the head to have gone to the North.

Samsung Headquarters Raided

The special investigation team raided Samsung headquarters this morning to seize further evidence for the slush funds. The whistleblower Kim Yong-chul had testified that there is a secret safe on the 27 floor of the headquarters, in which, he said, bunch of cashes and gift certificates accumulates and have frequently taken in and out for bribery purposes.

Hyundai Motor Makes Inroads into Securities Industry

Hyundai Motor said Jan. 14th that it struck a MOU with Shinheung Securities for the buyout of 29.76 per cent, or 3,455,089 shares on 11th . The company had previously revealed its ambition to take over a securities firm to make synergy effects with card, capital, and savings companies it owned, and to grow the financial company into an investment bank.

Government Offers houses to Newly-weds

The Construction Ministry is going to provide houses in the second half of this year to the newly-weds within three-year of marriage and the couples who are soon to be married. The ministry said it is reviewing the existing housing laws to revise them for the plan.

Prosecutors Raided Lee Kun-hee's Office

Fifty prosecutors raided this morning on Lee Kun-hee’s office in Itaewon, and senior Samsung officials houses including Lee Hak-soo and Kim In-joo in order to secure more concrete evidence for the allegation of Samsung’s amassing slush funds under the names of senior employees and to verify witnesses’ testimony that the chairman himself directly ordered to accumulate the secret funds.

President-elect Thinks More Practical NK Policy

It became known on Jan 13th that Lee Myung-bak had asked Christopher Hill that the US tried harder to dissipate North Korea’s concern over a regime-change through more active dialogue, during his meeting with the US nuclear negotiator on Jan 10th.

Seperately when he met with US Ambassador Alexander Vershbow recently, he is said to have told him “I am aware of my North Korean policy not being enough to encourage the North to openness,” and “to drive the North to openness, the North should not be worried over sustaining its regime, and the key is in the US hand.

An official close to the president-elect said “Lee seems to think that the current government’s prime North Korean policies such as seeking a declaration of an end to the Korean war or holding a summit meeting between the four major powers are not practical, thus do not mean much.... he will bring up more practical measures after his first summit meeting with President Bush in March or April.”

Special Investigation into BBK Scandal Set To Continue

The Constitutional Court ruled against the appeal filed by LMB’s six aides that the special investigation into the president-elect is unconstitutional, and cleared the way for independent prosecutors to continue their probe into the so-called ‘BBK scandal.’

The court, however, determined it is against the constitution that a witness can be summoned without warrant in this specific case, thus ensuring Lee Myung-bak can be only called into the prosecutor’s office for investigation only after the warrant is issued. But the investigation has its own limit since law stipulates president is not subject to criminal investigation.

Big Firms Increase Investment This Year

The Federation of Korean Industries revealed that the investment this year by 30 major Korean firms is expected to increase 19.1 per cent to W89.9 trillion from last year’s W75 trillion, which is in response to president-elect Lee Myung-bak’s determination to create a more business-friendly environment particularly by cutting unnecessary red-tape.

POSCO will double this year’s investment to W8 trillion from W4 trillion of last year and Hyundai and Kia Motors have promised to invest a total of W11 trillion, up from W7 trillion from a year ago. Hynix is the only company within the 30 biggest firms by market capitalization to reduce investment. The company slashes investment to W4 trillion from W4.4 trillion.

Independent Investigation Team Starts Probing Samsung Slush Funds

A special investigation team investigating into Samsung’s slush fund scandal has been up and running from Jan. 10. It will mainly look into three major controversial issues of amassing illegal slush funds, illegal transfer of management control to Lee Jay-yong, the heir-apparent of the Chaebol, and extensive lobbying to political, legal, and government sectors, with as long as 105 days before it wraps up the probe.

Lone Star Chairman Arrived in Korea for Court Trial

John Grayken, Lone Star chairman, arrived in Korea on Jan.9 to attend a court hearing on Jan 11 as a witness for the alleged stock price manipulation of KEB card. He will face intensive investigation by prosecutors after appearing in the court.

Asked whether the chairman can depart from Korea whenever he wants, prosecutor Kim Kang-wook said “he should abide by the Korean law,” hinting it is highly likely that he might be grounded until the investigation ends.

It seems the hope that his appearance could speed up the stalled sell-out of KEB to HSBC by April 30 when the contact expires encouraged the chairman to visit Korea.

But it remains to be seen whether his appearance in the court can expedite the investigation to finally bring an end to the dragged-on sale process or further aggravate the already painful procedure.

- The transition team will be considering adopting defensive measures against hostile takeover attempts, such as a ‘golden share’ when a public firm is privatized. However it will not introduce the rule to a private firm, in line with the global standard and considering a possible negative impact of the rule to the stock market.

- The new government is to establish an economic team within Cheong Wa Dae, with the mission of ‘control tower’ to manage and control overall economic policies

- The Fair Trade Commission is set to change its company investigation practices, often criticized as being ‘hard-handed,’ as the presidential transition team asked it to be more company-friendly. An official from the agency said “we have been conducting investigation according to law and relevant regulations but we are going to look into where there needs to be some revision on the existing practices as our investigation often makes firms ‘cowered.’”

- The Labor Ministry revised laws to enable firms to hire irregular workers from the current 2 years to three years to overcome prevalent practices by companies of firing non-regular workers after two-year contract expires.

- Korea Chamber of Commerce has submitted a recommendation to the new government, which asked to adopt more business-friendly measures such as aggressive corporate tax cut, abolishing the wall between banking and business sectors, and adopting defensive measures against hostile M&A attempts.

- The Board of Audit and Inspection of Korea is said to have been conducting probe into the management of inter-Korean cooperation funds since the end of last year. Seven or eight companies involved in the inter-Korean business have been confirmed to misuse the government fund.

Korea's Business Heavyweight Remains Low-profile

For a while it would be difficult to publicly see one of Korea's most powerful men. Samsung's chairman Lee Kun-hee refrains from appearing in public as his company is embroiled in a number of huge scandals which are under the state prosecutor's probe.

Except the meeting hosted by presdient-elect Lee Myung-bak a several days ago, the chairman remains as low profile as possible.

Lee Kun-hee is said not to attend the in-house ‘Proud Samsung Men’ award ceremony, due to be held Jan.9 at the company headquarters, which is the first absence by the chairman since its start where he has been giving the prize to winners by himself.

Given the importance and personal favoritism by Lee of the event, his absence clearly shows the on-going scandals are just as embrassing and serious to the company as the public feels about them.

on-going plans by presidential transition committee

The presidential transition committee announced to abolish the cap on chaebol’s cross-investment in affiliates because it is “an obstacle to boosting investment and no similar regulation exists in developed countries.” It also makes it easier for firms to establish holding companies by lifting regulations under which only firms with a debt-to-equity ratio of below 200 per cent and a less than 5 per cent stake in non-affiliates have been allowed to establish a holding company. Regular tax audit into big companies will be also shrunk.

It will add a new pension system to the current one, which provides people with the same amount of monthly pension, to guarantee a minimum standard of living and to correct the unfairness of the current system.

President-elect LMB’s grand plan to ‘save’ people who defaulted on their personal debt faces a big challenge as the public oppose the plan to delete defaulters’ debts and bad credit history. The transition committee plans to scale down the size of defaulters it planned to help out and withdraw the scheme to erase poor credit history.

- John Grayken, Lone Star Chairman, might face arrest when and if he comes to Korea to get investigated by the prosecutors as a witness for the alleged stock price manipulation of KEB card. He is believed to attend the court as early as January 9th.

- The presidential transition team will work on drawing a ‘new strategic master plan’ for forward-looking and comprehensive alliance with the US.

- It is widely speculated that a high-ranking official might attend the presidential inauguration ceremony slated to be held on Feb 25. The transition team and close aides to the president-elect say that there hasn’t been any official discussion on the matter with the North, but Nam Sung-wook, in charge of North Korean matters in the team, said “I think we should send a special envoy to the North during January so that a high-ranking official could come to attend the ceremony.”

- 2008 calendar designed by ‘무한도전’ team have been selling off like hot cakes. The sale reached W100m for a single day. The calendar, priced at W3,500, is 50,000-copy limited edition and the profits will be donated to charity. 무한도전’s last week episode was about taking funny photos by team members for the calendar.

- According to the government tourism agency, Kaesung tour is very popular, attracting 7,470 tourists as of the end of December since the launch of the program on Dec 5 and the number is expected to pass 9,000 tomorrow. Hyundai Asan plans to expand infrastructure and vary the program in accordance with growing visitors.

- According to BoK, last November’s outflow capitals regarding overseas studying decreased 4.3 per cent compared to a year earlier, for the second time since September last year when the capital outflow marked minus 0.2 per cent growth rate.

- The Fair Trade Commission expands surcharge deduction rate to 20 per cent from the current 15 per cent for companies which voluntarily report price-fixing collusion or fully cooperate with the investigation by the antitrust agency.

- A sequel to the hit movie ‘Monster’ is to be produced against the backdrop of Cheonggye Stream. The movie is scheduled to be out next summer.

- Three telecommunication subsidiaries of LG Group takes one step further from ‘expressing concerns’ to file a document at the Information Ministry and the Fair Trade Commission, saying SK Telecom’s takeover of Hanaro Telecom should not be allowed on the grounds of the group’s monopolizing the market. 　

- The presidential transition committee says the LMB government will remove governmental PR agency (국정홍보처) and recover briefing rooms.

- The presidential transition committee says the new government will more than halve the number of educational ministry staffs and distribute ministerial jobs to schools and other government agencies, measures which practically dissolve the ministry.

- The presidential transition committee is reconsidering LMB’s election pledges such as corporate tax reduction promise whether they are feasible.

- The Commerce Ministry said trade volume fell in the red in December last year, for the first time in four years and nine months, partly due to surging oil prices and rising raw material costs.