Nearly 47 trillion won in Asian financial crisis bailout funds remain unrecovered

The Korea Deposit Insurance Corporation has not recovered nearly 47 trillion won ($34.8 billion) of the public money it poured into failing financial companies after the Asian financial crisis, even as the government prepares to declare debts from the recovery settled.

The deposit insurer put 110.9 trillion won into financial companies between November 1997 and the end of June this year and has gotten back 64 trillion won, a recovery rate of 58 percent. The remaining 46.9 trillion won is still outstanding.

The figures come from a breakdown of support and recovery by institution that the corporation supplied to the office of Rep. Park Sung-hoon of the opposition People Power Party (PPP), also a member of the National Assembly's National Policy Committee, on Monday.

Money tied to the crisis falls into three strands. One is the bailout from the International Monetary Fund, which the government repaid in full in 2001. Another is the public money used to get failing financial companies back on their feet. The third is the debt created when the deposit insurer and the Korea Asset Management Corporation issued bonds to raise that money.

The government said it would clear debt from the three stands when it presented next year's budget. President Lee Jae Myung wrote on X this month that the country is "paying off the last debt of the foreign exchange crisis after 30 years."

Banks took the largest share at 44.2 trillion won and returned 32.8 trillion won, the highest recovery rate at 74 percent.

Investment trust companies fared worst. They received 12.5 trillion won and returned 3.4 trillion won, a rate of 27 percent.

Almost all of the money that went to investment trust companies was channeled into three firms. Korea Investment Trust Securities received 5.7 trillion won and returned 1.1 trillion won, or 19 percent. Daehan Investment Trust Securities returned 1.1 trillion won of the 3.6 trillion won it received, and Hyundai Investment Trust Securities returned 1.2 trillion won of 3.2 trillion won.

All three were nursed back to health with public money after the crisis and later sold to private financial firms, among them Korea Investment & Securities, Hana Securities and Hanwha Investment & Securities.

"More than 110 trillion won was put in at the public's expense in the name of restructuring the financial sector, and 28 years on, close to half of it is still unrecovered," PPP lawmaker Park said.

"The government and the agencies involved need to examine every long-outstanding asset, chase down whatever can still be recovered and keep the burden on the public to a minimum."

BY KIM DA-YOUNG [cho.yongjun1@joongang.co.kr]