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S. Korean firms urge support to cover fallout of inter-Korean complex shutdown

All News 16:19 June 12, 2017

SEOUL, June 12 (Yonhap) -- South Korean firms that operated factories at the now-shuttered joint industrial park in the North on Monday demanded the government compensate the unretrieved tens of billions of won in financial losses stemming from the shutdown.

During a debate session held at the National Assembly, Shin Han-yong, chief of the companies' association, said the Seoul government should provide 225 billion won (US$199 million) in assistance to cover losses it failed to make up.

In February 2016, the then Park Geun-hye government ordered a total of 124 South Korean companies operating at the Kaesong Industrial Complex to return home, in retaliation for the North's continued provocations including a fourth nuclear test. The inter-Korean industrial complex had been regarded as the icon of inter-Korean reconciliation.

The Seoul government said it has provided 508 billion won in financial assistance to the closure-hit South Korean firms so far, which is equivalent to some 72.5 percent of the estimated damage of 700.5 billion won. The actual support, however, differs by business depending on their insurance programs.

Shin said the government did not fully recover the companies' losses by capping the support, which he claims led to legal battles between the firms and their subcontractors.

"The companies are undergoing a severe liquidity crunch as their sales and credit ratings plummeted following the shutdown," he said, demanding the government provide emergency funding based on the inter-Korean cooperation fund.

Late last month, the government said it plans to provide additional support to the companies, adding it has yet to finalize the details and the scale of the compensation.

The association also called for the government to continue with the tax benefits it provided to the firms until the operation of the complex is normalized. The companies were granted taxation and financial support measures until last year.

This photo, taken on May 15, 2017, from the Dora Observatory in Paju, north of Seoul, shows the now-shuttered South Korean industrial park (front) in the North Korean city of Kaesong. Attention is being drawn to whether Seoul could resume the operation of the Kaesong Industrial Complex, which was shut down in 2016 following Pyongyang's nuclear and missile provocations. (Yonhap)


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