[HANJIN CRISIS] Hanjin Shipping fallout stirs fear of W1tr loss to taxpayers

[THE INVESTOR]  More than 1 trillion won (US$896.82 billion) of South Korean taxpayer’s money is expected to be lost as a result of Hanjin Shipping entering court receivership, local news reported on Aug. 31.

According to creditors, state-run Korea Development Bank -- the largest lender of Hanjin Shipping -- will incur a loss of 660 billion won, while Korea Credit Guarantee Fund will lose 430 billion won.

Once Hanjin Shipping’s receivership is approved by the court, the authorities will freeze all bonds and debt obligations, making it difficult for the two state-owned agencies to recover the outstanding debts. This means the Korean taxpayers will ultimately bear the brunt.

Hanjin Shipping on Aug. 31 reached an agreement to file for court receivership following the creditor’s decision to halt financing the previous day.

By Ahn Sung-mi (sahn@heraldcorp.com)