South Korea

South Korea’s competition watchdog is investigating the country’s four largest commercial banks over possible interest rates collusion, adding to a growing list of probes globally into the alleged rigging of various financial prices and benchmarks, the Financial Times reported. The Fair Trade Commission sent inspectors to Kookmin Bank, Woori Bank, Shinhan and Hana Bank this week to look into data related to setting interest rates, officials at each of the banks said on Wednesday.

Cash-strapped South Korean mobile-phone maker Pantech Co. filed for court receivership Tuesday after its latest flagship smartphone failed to take off, The Wall Street Journal reported. The company, in which Qualcomm Inc. and Samsung Electronics Co. are major foreign shareholders, has been relying heavily on the South Korean market to sell its phones, where rivals like Samsung and LG Electronics Inc. are dominant players. Pantech said it filed for court receivership after months of trying to restructure its debt.

Medium-size South Korean yard Daehan Shipbuilding, which has a huge bulker and products-tanker orderbook involving high-profile owners, has filed for court receivership, TradeWinds reported. The DSME-managed builder’s application to the Gwangju District Court early last week was based on a more than $50m claim, including interest accrued, by a shipowner and involving charter contracts signed by its sister company Daehan Merchant Marine, also known as Daehan Shipping. Hong Kong-based Goldbeam is said to be the company making the claim against Daehan Shipbuilding.

About 19.7 percent of the subsidiaries of Korean conglomerates are with impaired capital, or have a debt ratio of over 400 percent, BusinessKorea reported. According to management evaluation firm CEO Score, out of the 1,418 subsidiaries of the 47 business groups with an asset size of at least 5 trillion won (US$4.94 billion), a total of 279 companies were categorized into a group of marginal firms and subject to cross shareholding restrictions. Out of those, 110 had impaired capital and 169 of them had a debt ratio exceeding 400 percent.

The major shareholder of the South Korean operator of the ferry on which hundreds of high school students drowned in April has applied for receivership, a court said on Monday, Reuters reported. Chonhaiji Co Ltd, a ship block maker and the major shareholder of ferry operator Chonghaejin Marine Company, lodged its application at the Changwon District Court last week, a court official said. Chonghaejin Marine owned the Sewol, which sank on April 16 on a routine journey between the mainland port of Incheon and the holiday island of Jeju.

Approximately one-fourth of listed Korean companies are on the brink of insolvency, BusinessKorea reported. Consulting firm AlixPartners held a press conference on March 4 at the Westin Chosun Hotel in Seoul, saying that about 17 percent of the 1,600 or so companies it examined corresponded to On-Alert or a worse condition as of the end of the third quarter of 2013. AlixPartners used its own Corporate Distress Index, which considers the financial and stock price data of corporate entities, to obtain the analysis result.

While the spotlight maybe on the new gadgets being launched at Mobile World Congress by some of the world’s biggest tech companies, spare a thought for little old Pantech, South Korea’s ailing smartphone maker, The Wall Street Journal Korea Real Time blog reported. After trying for years to eke out profits and carve a niche for itself in the smartphone industry, Pantech is now seeking help to restructure its debt.

Ssangyong Engineering & Construction (E&C) has filed for court protection as its creditors refused to finance the cash-strapped builder, the Seoul-based company said Monday, The Korea Times reported. Ssangyong E&C said it held a board meeting Monday afternoon to ask the Seoul Central District Court to lead a debt-rescheduling program after one of its major creditors, the Military Mutual Aid Association, raised an objection to additional financial support to it.

Kookmin Bank, South Korea’s largest lender by assets, said it will close 55 branches in January as the country’s lenders struggle with the lowest lending margins in four years, Bloomberg reported. The closures will cut costs and help the Seoul-based bank, a unit of KB Financial Group Inc., better serve Korean customers who are using Internet banking more frequently, Kookmin Bank said in an e-mailed statement today. The lender has 1,205 branches across South Korea, company data show. Kookmin Bank is joining Standard Chartered Plc and Citigroup Inc.

South Korea’s three biggest shipping companies face a cash crunch as 3 trillion won ($2.8 billion) of bonds are due for repayment in the next two years amid mounting losses from a global slump in rates to carry cargo, Bloomberg reported. Hanjin Shipping Co., Hyundai Merchant Marine Co. and STX Pan Ocean Co. are all forecast to post losses in 2013 for a third consecutive year, further denting the combined 1.5 trillion won of cash and near cash items they had as of the end of June. The companies need to repay 1.4 trillion won of bonds next year and 1.6 trillion won the year after.