Controversy Over Daewoo Shipbuilding's Bargain Sale... Kang Seok-hoon "Assessing Measures to Minimize Public Loss"

"Daewoo Shipbuilding's Corporate Value Continues to Decline Even Under the KDB System"
"Management Normalization Through Private Ownership Is the Way to Minimize Public Losses"

Chairman Kang Seok-hoon is speaking at an emergency press conference on Daewoo Shipbuilding issues held at the Korea Development Bank headquarters in Yeouido, Seoul on the 26th. Photo by Kim Hyun-min kimhyun81@

[Asia Economy Reporter Yu Je-hoon] Kang Seok-hoon, Chairman of KDB Industrial Bank, said regarding the plan to sell Daewoo Shipbuilding & Marine Engineering (DSME) for about 2 trillion won and the controversy over the undervalued sale, "If the sale proceeds to Hanwha Group, I believe this plan minimizes the loss to the public."

Chairman Kang held a press conference at the Yeouido headquarters in Yeongdeungpo-gu, Seoul, in the afternoon and stated regarding the undervalued sale controversy, "Boldly investing in research and development (R&D) and finding a private owner who can improve management efficiency to normalize the company is the way to minimize the public's loss."

He first mentioned the stalking horse sale structure, saying, "Hanwha Group is currently the preferred bidder, and we will wait for a company that offers a better proposal than Hanwha Group within a certain period," adding, "Under the current conditions, Hanwha Group is the preferred bidder, but it is not the final acquirer."

However, Chairman Kang diagnosed, "For the past 21 years, KDB has been the major shareholder of DSME, and especially after the insolvency in 2015, DSME has been under KDB’s wing for nearly seven years, but its corporate value has continuously and helplessly declined," adding, "DSME was in a very difficult situation, with losses of 1.7 trillion won last year alone and 600 billion won in the first half of this year."

When asked about the reason for selecting Hanwha Group as the preferred bidder and whether he met with Kim Seung-yeon, Chairman of Hanwha Group, he said, "We approached most domestic large corporations engaged in manufacturing. I can say we contacted all possible groups in our country," adding, "Regarding whether I met Chairman Kim, it is inappropriate to disclose specifics, but we confirmed Hanwha Group’s acquisition intention through various means."

Regarding whether there will be restructuring for management normalization after the sale, Chairman Kang said, "I think it is an important part, and if Hanwha Group confirms the acquisition, they will take various measures to improve management efficiency. Since KDB has related experience, there will be areas where we can mutually assist," but he drew a line by saying, "I believe that the party to strengthen management efficiency after selling the management rights will be Hanwha Group."