Sangnoksu Cheil Securitization Specialty Co., a private-sector bad bank set up during the 2003 credit card crisis, agreed on the 12th to sell 845 billion won worth of long-term delinquent debt to the New Leap Fund. The move came immediately after President Lee Jae-myung criticized "primitive predatory finance" for "choking the livelihoods of ordinary citizens."
Shin Jin-chang, secretary general of the Financial Services Commission, held an emergency meeting with Sangnoksu's nine member firms at the Government Complex in Seoul that day and decided to sell debts of 50 million won or less that are more than seven years old to the New Leap Fund as soon as possible.
The nine financial firms also plan to sell debts not eligible for the New Leap Fund to the Korea Asset Management Corp. (Kamco) in the near future. Through these measures, about 110,000 debtors will be freed from 845 billion won in debt and related collection activities.
The FSC plans to conduct a full-scale survey of companies that, like Sangnoksu, hold long-term delinquent debt in the form of securitization vehicles. It will also continue to urge moneylenders holding large volumes of long-term delinquent debt to sell them to the New Leap Fund.
Sangnoksu is a private bad bank established during the 2003 credit card crisis to clean up massive nonperforming loans held by card companies and help debtors get back on their feet quickly. It has continued collection and recovery activities for 23 years since its founding.
The FSC had been working since the first quarter to persuade Sangnoksu to sell the debts in order to help debtors suffering for extended periods, but progress had been slow. The mood shifted sharply that day when President Lee said, "I didn't know such primitive predatory finance was still openly alive and choking the livelihoods of ordinary citizens," and asked, "Why have the regulators failed even to detect such injustice?"
