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Korea Report - February, 2017.

A number of friends asked us various questions about the arrest of Samsung Group’s de facto leader, Lee Jae-yong. Will this arrest have fundamental impact as to social punishment for Samsung Group? Will this cause a bottleneck in management to Samsung’s subsidiary companies, especially, will it have impact on irregularity on routine activities such as Refund Guarantee for SHI. We responded as follows. This investigation is evaluated as irrational action without any firm requisites, only to attain the least requirement to impeach on President Park. Samsung Group is respected as a company that had contributed a great deal not only to the industry but to the country. It has earned more trust than the public prosecutors themselves. The value of the company’s stock has not been affected by the incident. Therefore, we answered to our friends that the Refund Guarantee will be healthily issued for SHI to maintain its stable operation. Problem is market not prosecutors.

Lotte International signed a contract with the ministry to swap military land for the golf course to deploy the Terminal High Altitude Area Defense battery quickly.  China’s official Xinhua news agency said. “Lotte may have to take a large portion of responsibility.” “By agreeing to the THAAD deployment, SKorea has turned itself into a powder keg,” the People’s Daily of the Chinese Communist Party said. “If THAAD is really deployed in SKorea, then China-SKorea relations will face the possibility of getting ready to cut off diplomatic relations,” the WeChat of the People’s Daily said. What kind of diplomatic relation they are talking about. State-run Global Times said China should show Lotte the door as a warning to other Korean companies. “SKorean cars and cellphones should be targeted. There are many substitutes for them,” it said. Despite these threats, Lotte decided to approve the land-swap deal for the national interests of SKorea. It deserves to be applauded. Lotte runs about 120 stores in China with a combined annual sales of KW3.2 tril ($2.8 bil). It has invested KW10 tril in China. Some 20,000 Chinese people are employed by 24 Lotte Group affiliates. China has stopped cultural exchange and ordered all the touris exclude SKorea from their designation. The THAAD an issue of national security, not business. NK is getting bolder in its provocations. It recently fired a ballistic missile and hired people to assassinate the half brother of its leader Kim Jong-un. The missile interception system is an inevitable choice for SKorea to protect its people from NK’s missile attacks. Basically, deploying the system is a matter of SKorean self-defense. If China thinks the move will hurt its interests, it should not take it out on the company that sold its golf course to the military, but should instead stop NK from provoking. Actually, they have always been bystander making cynical remarks. We really like to see how they behave when China is threatened by some intruders like NK inside or outside their territory. China proudly call them great power, but behave small, very small, very small fry. 

TOPICS.

SKorea’s Constitutional Court continues a trial on the impeachment of President Park (p.2)

The court approved the arrest of Lee Jae-yong, heir apparent of Samsung Group (p.2)

Former UN Secretary-General Ban gave up a run in upcoming presidential election (p.3)

China blocked Korean business and cultural exchange on THAAD (p.3)

Kim Min-hee won the Silver Bear for Best Actress at Berlin International Film Festival (p.5)

Kim Jong-nam, NKorean leader Kim Jong-un’s half-brother, was killed in Malaysia (p.6)

NK launched a ballistic missile off its east coast on 12th (p.7)

Seoul and Washington on 3rd vowed to deploy THAAD system as planned this year (p.7)

SKorea’s trade surplus widened to $7.22 bil in Feb (p.9)

Samsung’s reputation in the US plummeted to No 49 among 100 corporations (p.11)

POSCO has completed construction of a lithium extraction plant (p.13)

HMC and Kia Motors won four awards at International Forum Design Award (p.14)

Korean stocks are the most undervalued in the world (p.15)

KWon against USDollar strenthened to 1.130 (p.16)

Global newbuilding orders totaled 31 vessels of combined 1.40 mil dwt in Jan (p.17)

HHI recorded operating profit of KW1.6419 tril in 2016 (p.19)

HHI decided to spin off its three businesses (p.19)

HMD posted operating profit of KW207.5 bil ($181 mil) in 2016 (p.20)

SPP Shipbuilding is to enter liquidation procedures from the end Feb (p.21)

With Hanjin Shipping’s bankruptcy, HMM is expected to fill the vacuum (p.22)

KSMT is to purchase 10 ships from HMM and lease them back (p.22)

Court declared bankruptcy of Hanjin Shipping on 17th, 40 years after its establishment (p.22)

KAMCO decided to provide liquidity of KW1 tril to restructure shipping companies (p.23)

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