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Laws of the Republic of Korea |
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ACT ON THE EFFICIENT DISPOSAL OF NON-PERFORMING ASSETS, ETC. OF FINANCIAL INSTITUTIONS AND THE ESTABLISHMENT OF KOREA ASSET MANAGEMENT CORPORATION
Act No. 5371, Aug. 22, 1997
Amended by Act No. 5505, Jan. 13, 1998
Act No. 5978, Apr. 30, 1999
Act No. 6073, Dec. 31, 1999
Act No. 6561, Dec. 31, 2001
Act No. 6627, Jan. 26, 2002
Act No. 6737, Dec. 5, 2002
Act No. 7058, Dec. 31, 2003
Act No. 7526, May 31, 2005
Act No. 7621, Jul. 29, 2005
Act No. 7796, Dec. 29, 2005
Act No. 7885, Mar. 24, 2006
Act No. 8140, Dec. 30, 2006
Act No. 8698, Dec. 21, 2007
Act No. 8852, Feb. 29, 2008
Act No. 8863, Feb. 29, 2008
CHAPTER GENERAL PROVISIONS
Article 1 (Purpose)
The purpose of this Act is to prescribe the matters necessary for facili-
tating the efficient disposal of non-performing assets
held by financial
institutions and for supporting the efforts for management normalization
of the enterprises which show signs
of insolvency and to contribute to
the development of the financial industry and the national economy
through improving the liquidity
and soundness of assets of financial
institutions by creating a Non-Performing Loan Resolution Fund and by
establishing the Korea
Asset Management Corporation, which are to carry
out and support relevant services.
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Article 2 (Definitions)
The definitions of the terms used in this Act shall be as follows: 1. The term "financial institutions" means those falling under one of the
following items:
(a) Financial institutions which obtain authorization under Article
8 (1) of the Banking Act;
(b) The Korea Development Bank established under the Korea De-
velopment Bank Act;
(c) The Industrial Bank of Korea established under the Industrial
Bank of Korea Act;
(d) Long-term credit banks under the Long-Term Credit Bank Act;
(e) The Export-Import Bank of Korea established under the Export-
Import Bank of Korea Act;
(f) The National Agricultural Cooperative Federation established
under the Agricultural Cooperatives Act;
(g) The National Federation of Fisheries Cooperatives established
under the Fisheries Cooperatives Act;
(h) Deleted; and 2. The term "non-performing loans" means the principal of loans and inter-
est thereon, payment guarantee, and other equivalent loans
as pre-
scribed by the Presidential Decree which arise from credit transactions
by financial institutions and fall under any of
the following items:
(a) A loan requiring the adoption of a special collection measure or
management method which is not repaid
in normal ways for any
reason such as dishonor; and
(b) A loan whose collection is or is likely to be in any considerable
risk in the light of the management conditions, financial
standing,
and expected demand for cash, of a debtor, etc. and which is rec-
ognized by the Management Committee under Article 14;
3. The term "enterprise showing signs of insolvency" means the enter-
prise which financial institutions or organizations composed
of finan-
cial institutions (hereinafter referred to as "financial institutions,
etc.") judge, from among their clients, likely
to face managerial diffi-
culties or insolvency due to its mismanagement;
4. The term "assets for non-business use" means the assets falling under
one of the following items:
(a) Assets acquired by financial institutions as payments of nonper-
forming loans;
ACT ON THE EFFICIENT DISPOSAL OF NON-PERFORMING ASSETS, ETC. OF
FINANCIAL INSTITUTIONS AND THE ESTABLISHMENT OF KOREA ASSET
MANAGEMENT
CORPORATION
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(b) Assets that financial institutions intend to sell for improving
their financial structure and normalizing their management,
etc.,
as prescribed by the Presidential Decree; and
(c) Assets for non-business use prescribed by the Corporate Tax Act,
the Local Tax Act, or other Acts and subordinate statutes;
4-2. The term "overseas non-performing assets" means the assets pos-
sessed by foreign financial institutions (referring to those
established
by the foreign Acts and subordinate statutes and operating the fi-
nancial business, which are corresponding to financial
institutions)
or the overseas asset management institutions corresponding to the
Korea Asset Management Corporation, which are
corresponding to the
non-performing loans and the assets for non-business use;
5. The term "self-rescue plan" means a plan which an enterprise showing
signs of insolvency formulates in consultation with financial
institu-
tions, etc. to dispose of its assets including real estate and securities,
etc. or the affiliated companies thereof (hereinafter
referred to as
"assets subject to self-rescue plan") for the purpose of management
normalization;
5-2. The term "affiliated company" means a company that is part of the
relevant business group controlled by himself in the case
of controlling
a business group of mutual investment restriction, a business group
of gross investment restriction or a business
group of liability guaranty
restriction designated pursuant to the Monopoly Regulation and Fair
Trade Act; and
6. The term "acquisition" means that the Korea Asset Management Cor-
poration acquires assets of financial institutions or enterprises
di-
rectly or at the expense of a Non-Performing Loan Resolution Fund.
CHAPTER EFFICIENT DISPOSAL OF
NON-PERFORMING ASSETS,
ETC.
Article 3 (Management of Non-Performing Assets by Financial Institu-
tions)
(1) Financial institutions shall make efforts to prevent non-performing
loans by strengthening ex post facto control of their credit.
(2) Financial institutions shall make efforts to upgrade their managerial
soundness by accelerating the disposal of their non-performing
loans and
assets for non-business use (hereinafter referred to as "non-performing
ACT ON THE EFFICIENT DISPOSAL OF NON-PERFORMING
ASSETS, ETC. OF
FINANCIAL INSTITUTIONS AND THE ESTABLISHMENT OF KOREA ASSET
MANAGEMENT CORPORATION
4
assets").
Article 4 (Entrustment, Acquisition, etc. for Disposal of Non-Performing
Assets)
(1) Any financial institution may entrust the Korea Asset Management
Corporation with the disposal of non-performing assets (referring
to the
recovery or collection of claims, or sales of property; hereinafter the same
shall apply), or request the Corporation to
acquire them in order to
promptly dispose of its non-performing assets.
(2) The Korea Asset Management Corporation shall, when it is entrusted
by a financial institution with the disposal of the non-performing
assets
or requested to acquire them from a financial institution pursuant to par-
agraph (1), make efforts in order to promptly
dispose of them.
(3) Matters necessary for the entrustment and acquisition by the Korea
Asset Management Corporation under paragraph (1) including
the
methods or procedures thereof and the priority and criteria, etc. for ac-
quisition shall be prescribed by the Presidential
Decree.
Article 5 (Support for Normalization of Enterprises Showing Signs of
Insolvency)
(1) Financial institutions, etc. may request the Korea Asset Manage-
ment Corporation to support the self-rescue plan of an enterprise
showing
signs of insolvency.
(3) The Korea Asset Management Corporation may, when a financial in-
stitution, etc. requests the support for a self-rescue plan
pursuant to
paragraph (1), conduct a management diagnosis or perform consulting
services to support management normalization for
the enterprise showing
signs of insolvency.
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(5) The Korea Asset Management Corporation shall, when it disposes of
the assets subject to self-rescue plan by undertaking the
sale of such as-
sets or acquires them pursuant to paragraph (2), have the prices be paid
first for the payment of the debts which
the enterprises showing signs
of insolvency owe to the financial institutions, etc.
CHAPTER KOREA ASSET MANAGE-
MENT CORPORATION
SECTION 1 General Provisions
Article 6 (Establishment)
The Korea Asset Management Corporation (hereinafter referred to as the
"Corporation") shall be established in order to accelerate
the disposal of
non-performing assets held by financial institutions, and to efficiently
support the management normalization,
etc. of the enterprises showing
signs of insolvency.
The Corporation shall be a juristic person.
Article 8 (Offices)
(1) The location of the main office of the Corporation shall be provided
in its articles of incorporation.
(2) The Corporation may, when necessary for performing its services,
establish branch offices or business offices in appropriate
places as pro-
vided in its articles of incorporation.
Article 9 (Capital)
(1) The capital of the Corporation shall be one trillion won.
(2) The capital of the Corporation shall be invested by financial insti-
tutions.
(3) The Government may, when it is deemed necessary for supporting
the performance of services by the Corporation, invest therein
or support
necessary expenses.
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matters relating to the payment of capital contribution including calculation
methods, period and method of payment, etc. of capital
contribution shall
be prescribed by the Presidential Decree.
Article 10 (Stocks)
The capital of the Corporation shall be divided into stocks.
Article 11 (Articles of Incorporation)
(1) The articles of incorporation of the Corporation shall contain the matters
falling under each of the following subparagraphs:
1. Purpose;
2. Denomination;
3. Matters relating to the main office, branches, and business offices;
4. Matters relating to capital and stocks;
5. Matters relating to the Management Committee and the board of
directors;
6. Matters relating to officers and employees;
7. Matters relating to services and execution thereof;
8. Matters relating to the Non-Performing Loan Resolution Fund;
9. Matters relating to the issuance of Non-Performing Loan Resolution
Fund Bonds and debentures;
10. Matters relating to accounting;
11. Matters relating to the methods of public announcement;
12. Matters relating to amendments to the articles of incorporation; and
13. Such other matters as prescribed by the Presidential Decree.
(2) The Corporation shall, when it intends to amend its articles
of in-
corporation, obtain authorization from the Financial Service Commission
with the resolution of its Management Committee
provided in Article 14.
(1) The Corporation shall be duly established upon the completion of
establishment registration at the location of its main office.
(2) The matters to be entered in the establishment registration pur-
suant to paragraph (1) shall be as follows:
1. Purpose;
2. Denomination;
3. Location of the main office;
4. Capital;
ACT ON THE EFFICIENT DISPOSAL OF NON-PERFORMING ASSETS, ETC. OF
FINANCIAL INSTITUTIONS AND THE ESTABLISHMENT OF KOREA
ASSET
MANAGEMENT CORPORATION
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5. Names and addresses of officers; and
6. Methods of public announcement.
(3) Matters necessary for the registration of the Corporation other than
those provided for in
this Act shall be prescribed by the Presidential
Decree.
Article 13 (Prohibition of Use of Similar Denominations)
No entity other than the Corporation shall use as its denomination, the
"Korea Asset Management Corporation" or other terms similar thereto.
SECTION 2 Management Committee
Article 14 (Establishment of Management Committee)
(1) The Management Committee (hereinafter referred to as the "Com-
mittee")
shall be established in the Corporation.
(2) The Committee shall deliberate and resolve the matters falling under
each of the following
subparagraphs:
1. Formulation of and amendment to the operational policy and busi-
ness plan of the Corporation;
2. Amendment to the articles of incorporation;
3. Formulation of and amendment to the operational rules;
4. Drawing-up of and amendment to the budget, and the account set-
tlement;
5. Formulation of and amendment to the operational plan of the Non-
Performing Loan Resolution Fund;
6. Annual issuance ceiling on Non-Performing Loan Resolution Fund
Bonds and debentures;
7. Acquisition of non-performing assets and the real estate and securities
held by enterprises showing signs of insolvency (limited
to those ex-
ceeding the size prescribed by the Presidential Decree);
8. Acquisition of the companies affiliated with enterprises showing signs
of insolvency;
8-2. Matters concerning the services under Article 26 (1) 1-3, 10-2, and
10-3; and
9. Other matters to be provided in the articles of incorporation from
among those relating to the operation of the Corporation and
the Non-
ACT ON THE EFFICIENT DISPOSAL OF NON-PERFORMING ASSETS, ETC. OF
FINANCIAL INSTITUTIONS AND THE ESTABLISHMENT OF KOREA
ASSET
MANAGEMENT CORPORATION
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Performing Loan Resolution Fund.
(3) With respect to matters falling under paragraph (2) 8-2 which re-
quire a swift measure for efficient disposal of non-performing
assets or
for which simple and repetitive measure is expected, the Committee may
have the board of directors of the Corporation
handle such matters within
the limit set by a prior resolution of the Committee.
Article 15 (Composition of Committee)
(1) The Committee shall be composed of five members falling under each
of the following items:
1. The president of the Corporation;
2. A person designated by the Financial Service Commission from among
public officials in general service belonging to the Senior
Civil Service
of the Financial Service Commission;
2-2. A person who is designated by the Minister of Strategy and Finance
from among public officials in general service belonging
to the Senior
Civil Service of the Ministry of Strategy and Finance;
3. Deleted; 4. An officer designated by the president of the Korea Deposit Insur-
ance Corporation;
5. The Deputy Governor of the Korea Development Bank;
6. Two persons at the deputy chairman level from the National Banks
Association, incorporated association, that is established under
Article
32 of the Civil Act by permission of the Financial Service Commission,
and from the financial institutions which are members
of the National
Banks Association, upon recommendation of the president of the
National Banks Association;
7. Deleted; and 8. Each person with vast experiences and knowledge in financial industry
and business management, commissioned by the Financial Service
Commission, upon recommendation of the president of the Corporation
from among those falling under each of the following items:
(a) An attorney-at-law or a certified public accountant;
(b) Deleted;
(c) A professor of a university or a doctorate holder who belongs to
ACT ON THE EFFICIENT DISPOSAL OF NON-PERFORMING ASSETS, ETC.
OF
FINANCIAL INSTITUTIONS AND THE ESTABLISHMENT OF KOREA ASSET
MANAGEMENT CORPORATION
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a research institute.
(2) Qualifications for the members mentioned in paragraph (1) 8 shall
be prescribed by the Presidential Decree.
(3) The terms of office of the members mentioned in paragraph (1) 8
shall be three years.
(4) Article 20 shall apply mutatis mutandis to the status guarantee of
the members mentioned in paragraph (1) 8.
Article 16 (Operation of Committee)
(1) The president of the Corporation shall be the Chairman of the Com-
mittee.
(2) The Chairman shall represent the Committee and supervise the af-
fairs concerning the administration of the Committee.
(3)
When the Chairman is unable to perform his duties and functions
due to unavoidable reasons, the members mentioned in Article 15
(1) 2
through 6 shall act for him in the order of the provisions.
(4) The Chairman shall call meetings of the Committee in accordance
with
the articles of incorporation, and preside over the meetings.
(5) The resolutions of a Committee meeting shall be adopted
by the
attendance of a majority of all members and by the concurrence of a simple
majority of those present.
(6) Matters necessary for the operation of the Committee other than
those provided in this Act shall be prescribed by the Presidential
Decree.
SECTION 3 Officers and Employees
Article 17 (Officers)
(1) The Corporation shall have as its officers one president, one vice pres-
ident, five or fewer directors, and one statutory auditor.
(2) The president shall be elected at a stockholders' meeting subject to
ex post facto approval from the Financial Service Commission.
(5) The terms of office of the officers shall be three years. This shall also
ACT ON THE EFFICIENT DISPOSAL OF NON-PERFORMING ASSETS,
ETC. OF
FINANCIAL INSTITUTIONS AND THE ESTABLISHMENT OF KOREA ASSET
MANAGEMENT CORPORATION
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apply to the terms of newly elected or appointed officers due to vacancy of
any officer.
Article 18 (Duties of Officers)
(1) The president shall represent the Corporation and exercise general
control over the business thereof.
(2) The vice president shall assist the president and act for the president
when the president is unable to perform his duties due
to unavoidable
reasons.
(3) Directors shall assist the president and the vice president and under-
take their respective duties in such manner as prescribed
in the articles
of incorporation, and when both the president and the vice president are
unable to perform their duties due to
unavoidable reasons, they shall act
for them in the order provided in the articles of incorporation.
(4) The statutory auditor
shall audit the business affairs and accounts
of the Corporation.
Article 19 (Disqualification for Officers)
No person falling under any of the following subparagraphs may be an
officer of the Corporation: 1. A person who is not a Korean national; and
2. A person falling under any subparagraph of Article 33 of the State
Public Officials Act.
Article 20 (Guarantee of Officer's Status)
No officer shall be discharged from his office against his own will during
his term of office unless he falls under any of the following
subparagraphs:
1. When he falls under any subparagraph of Article 19;
2. When he violates this Act, the orders thereunder, or the articles of
incorporation; and
3. When he is unable to perform his duties on account of mental or phys-
ical disability.
Article 21 (Restriction on Power of Representation of President, etc.)
The president or the vice president or director who acts
therefor pur-
suant to Article 18 (2) and (3) shall not represent the Corporation in
the cases where his interests conflict with
those of the Corporation. In
such cases, the statutory auditor shall represent the Corporation.
Article 22 (Board of Directors)
(1) The board of directors shall be established in the Corporation to re-
ACT ON THE EFFICIENT DISPOSAL OF NON-PERFORMING ASSETS,
ETC. OF
FINANCIAL INSTITUTIONS AND THE ESTABLISHMENT OF KOREA ASSET
MANAGEMENT CORPORATION
11
solve the matters which should be referred to the Committee and other
important matters concerning the duties of the Corporation.
(2) The board of directors shall consist of the president, the vice president,
and directors.
(3) The president shall call a meeting of the board of directors, and preside
over it.
(4) The resolution of a board of directors shall be adopted by the atten-
dance of a majority of all members and by the concurrence
of a simple
majority of those present.
(5) The statutory auditor may attend a meeting of the board of directors
and present his views.
Article 23 (Exercise of Rights and Appointment of Representatives)
An officer or employee designated by the president may conduct
all judi-
cial or extra-judicial actions pertaining to the business of the Corpora-
tion.
Article 24 (Appointment or Discharge of Employees)
The president shall appoint and discharge employees of the Corporation.
Article
25 (Prohibition of Concurrent Holding of Offices)
(1) No officer or employee shall be concurrently engaged in any business
other
than his office, for profit-making.
(2) No officer shall concurrently hold other offices without approval from
the Financial Service Commission, and no employee shall
concurrently
hold other offices without approval from the president.
SECTION 4 Services
Article 26 (Services)
(1) The Corporation shall perform the services falling under each of the
following subparagraphs:
ACT ON THE EFFICIENT DISPOSAL OF NON-PERFORMING ASSETS, ETC. OF
FINANCIAL INSTITUTIONS AND THE ESTABLISHMENT OF KOREA ASSET
MANAGEMENT
CORPORATION
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1. Undertaking of the preservation and collection (including all acts
arising from provisional attachment, provisional disposition,
and
court auction or litigation under the Civil Procedure Act and the Civil
Execution Act; hereinafter the same shall apply) of
non-performing
loans, and acquisition and disposal thereof;
1-2. Management of the securitization assets entrusted under Article 10
(1) of the Asset-Backed Securitization Act;
1-3. Performance of each service listed in the following items for the effi-
cient disposal of non-performing assets:
(a) Purchase of non-performing loans from the Non-Performing Loan
Resolution Fund, and acquisition of stocks (including investment
certificates) arising from equity swaps of the investment on non-
performing loans into equity;
(b) Acquisition of bonds or securities issued by a special purpose com-
pany, etc. under Article 3 (1) of the Asset-Backed Securitization
Act;
(c) Loan of money to a corporation whose stocks (including invest-
ment certificates) have been acquired pursuant to item (a) or
which
has been given investments pursuant to subparagraph 10-2
(hereinafter referred to as an "invested corporation") and guar-
antee of payment for such corporation to the extent determined
by the Presidential Decree within the scope of 500/100 of the
total
sum of the paid-in capital, revenue reserve, and business
extension reserve of the Corporation; and
(d) Financial support, including sales of the assets (including col-
laterals) taken over by the Corporation on credit for purchasers,
lending money and managing non-performing assets for their effi-
cient disposal, or others such as contribution to debtors' recovery
and preservation and value-increase of collaterals, and guarantee
of payment (excluding guarantee of payment for redemption of
any loan and interest thereon) within the scope of payment guar-
antee referred to in item (c);
2. Preservation and collection of non-performing loans and investigation
of assets belonging to persons related to the debts;
3. Undertaking of the management and sales of the assets subject to
self-rescue plan of an enterprise showing signs of insolvency,
and the
ACT ON THE EFFICIENT DISPOSAL OF NON-PERFORMING ASSETS, ETC. OF
FINANCIAL INSTITUTIONS AND THE ESTABLISHMENT OF KOREA ASSET
MANAGEMENT CORPORATION
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acquisition and disposal thereof;
4. Management diagnosis of an enterprise showing signs of insolvency,
and consultation for the support of normalization thereof;
5. Management, sales, and brokerage of sales of assets for non-business
use as well as assets belonging to corporations and their
affiliated
companies intending to reorganize their structure or improve their
financial structure by way of merger, conversion
and consolidation
(hereinafter referred to as "restructuring companies"), and acquisi-
tion and arrangement thereof to intermediate
sales and promote the
soundness of financial institutions;
6. Management and operation of the Non-Performing Loan Resolution
Fund;
7. Sales of attached property which governmental agencies entrust to
the Corporation according to Acts and subordinate statutes,
the follow-
up management such as distribution of paid prices, etc., and purchase
and development of related property (including
qualified property
such as mortgage; hereinafter the same shall apply) in order to pre-
serve and increase the value thereof;
8. Management and disposal of property which governmental agencies
entrust to the Corporation according to Acts and subordinate stat-
utes, the preservation and collection of claims, and purchase and de-
velopment of related property to preserve and increase the
values
thereof;
9. Liquidation procedures of companies, not less than half of the stocks
or shares of which are possessed by the State in accordance
with the
National Properties Act;
10. Purchase and development of property arising from the performance of
services offered by the Corporation under subparagraphs
1 through 3
and 5;
10-2. Contributions and investments arising from the performance of
services offered by the Corporation (excluding the services
under sub-
paragraph 10-3);
10-3. Contributions and investments for the purposes of investments to
the overseas non-performing assets on the companies, etc.
as pre-
scribed by the Presidential Decree;
11. Real estate-secured trust business and trust business for manage-
ment or disposal of the real estate of restructuring companies,
which
ACT ON THE EFFICIENT DISPOSAL OF NON-PERFORMING ASSETS, ETC. OF
FINANCIAL INSTITUTIONS AND THE ESTABLISHMENT OF KOREA ASSET
MANAGEMENT CORPORATION
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are governed by the Trust Business Act; and
12. Services incidental to those falling under subparagraphs 1 through
11, as prescribed by the Presidential Decree.
(2) Where the Corporation engages in the services under paragraph (1)
11, it shall be considered to legally get trust business authorization
under the Trust Business Act.
(4) The Corporation may charge fees and expenses with regard to the
performance of services mentioned in paragraph (1) 1 through
6, and 12
in such manner as determined by the Committee, and it may charge them
fees and expenses with regard to the performance
of services mentioned
in paragraph (1) 7 through 9 and 11 in such manner as provided in the
relevant Acts and subordinate statutes.
(5) Necessary matters relating to the scope, criteria, etc. of the real es-
tate for development mentioned in paragraph (1) 10 shall
be prescribed
by the Presidential Decree.
(6) Matters necessary for the limit of contributions and investments
under the provisions of paragraph (1) 10-3 and risk-control
systems,
etc. shall be prescribed by the Presidential Decree.
(7) The Corporation shall formulate the operational rules for performing
the services pursuant to paragraph (1) and complete them
through the
resolution of the Committee. This shall also apply to the cases of the
amendments thereto.
Article 27 (Promotion of Disposition of Real Estate)
(1) The Corporation may take measures necessary for the preservation
or increase
of utility values when it is difficult to sell the real estate
acquired in relation to the performance of services mentioned in
Article
26 (1) 1 through 3, 5, 7 and 8 because of administrative restrictions or
limitation in use; and it may purchase the adjoining
real estate to those
when it is necessary to preserve or to increase utility values thereof.
(2) Necessary matters relating to
the scope, criteria, and purchase pro-
ACT ON THE EFFICIENT DISPOSAL OF NON-PERFORMING ASSETS, ETC. OF
FINANCIAL INSTITUTIONS AND
THE ESTABLISHMENT OF KOREA ASSET
MANAGEMENT CORPORATION
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cedures, etc. of the adjoining real estate mentioned in paragraph (1) shall
be prescribed by the Presidential Decree.
Article 28 (Lease, Operation, etc. of Movables, Real Estate, and Affil-
iated Companies)
(1) The Corporation may lease acquired movables, real estate, and affil-
iated companies of an enterprise showing signs of insolvency
until they
are sold off.
(2) The Corporation may, when necessary for performing its duties, par-
ticipate in the management of a corporation referred to
in the following
subparagraphs or arrange its staff members to work therefor:
1. An invested corporation;
2. A corporation to which the Corporation lends its money or for which
the Corporation guarantees the payment under Article 26 (1)
1-3 (d);
and
3. An affiliated company of an enterprise showing signs of insolvency
which the Corporation has acquired.
SECTION 5 Finance and Accounting
Article 29 (Fiscal Year)
The fiscal year of the Corporation shall be the same as that of the Gov-
ernment.
Article 30 (Business Plan, Budget, and Closing Accounts)
(1) The business plan and budget of the Corporation shall be finalized
through resolution of the Committee before the commencement of each
fiscal year.
(2) The closing statement of the Corporation shall be approved, through
resolution of the Committee, at a stockholders' meeting
within two months
after the termination of each fiscal year.
(3) The business plan, budget, and closing statement mentioned in par-
agraphs (1) and (2) shall be submitted to the Financial Service
Commission
without delay after the resolution of the Committee or the approval at
a stockholders' meeting.
Article 31 (Revenue and Expenditure)
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(1) The revenue of the Corporation shall be the fees and sales margin
in performing the services, and the income arising from operation,
etc.
of surplus funds.
(2) The expenditure of the Corporation shall be the administrative costs
and other expenses necessary for performing the services
thereof.
Article 32 (Appropriation of Loss and Profit)
(1) The Corporation shall, when it makes profits as a result of closing
its accounts each fiscal year, appropriate them in the following
order:
1. Making up for carried-over losses;
2. Accumulation of 20/100 or more of the profit in legal reserve until
such legal reserve amounts to the capital provided in Article
9 (1);
3. Accumulation in business expansion reserve; and
4. Dividends to stockholders.
(2) The Corporation shall, when it makes losses as a result of closing
its accounts each fiscal year,
make up for them with business expansion
reserve mentioned in paragraph (1) 3; if not sufficient, with legal reserve
mentioned
in paragraph (1) 2; and, the insufficient amount shall be
carried forward to the following fiscal year.
(3) The legal reserve and business expansion reserve mentioned in
paragraph (1) 2 and 3 may, through resolution of the Committee,
be
transferred to the capital or the Non-Performing Loan Resolution Fund.
Article 33 (Issuance of Debentures)
(1) The Corporation may, through resolution of the board of directors,
issue debentures.
(2) The outstanding debenture shall not exceed ten times the aggregate
of paid-in capital, legal reserve, and business expansion
reserve of the
Corporation.
(3) The Government may guarantee the repayment of principal and in-
terest of the debentures issued by the Corporation. In this
case, such
issuing amount of the guaranteed debentures shall not be included in the
limit mentioned in paragraph (2).
(4) The extinctive prescription of the debentures shall be five years for
principal, and two years for interest.
Article 34 (Borrowing of Funds)
The Corporation may borrow funds necessary for performing the services
from domestic or foreign financial institutions and other
persons.
Article 35 (Operation of Surplus Funds)
The Corporation may operate its surplus funds arising in the course of
performing its services by the methods falling under one
of the following
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MANAGEMENT CORPORATION
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subparagraphs:
1. Deposit with financial institutions;
2. Purchase of state bonds or local government bonds, or securities
whose payment is guaranteed by the Government or financial insti-
tutions; and
3. Other methods determined by the Committee.
Article 36 (Request for Submission of Materials)
The Corporation may, when it deems necessary, request the competent
administrative agency, interested persons, etc. to submit relevant
ma-
terials.
Article 37 (Relation with Other Acts)
(1) The provisions on stock companies in the Commercial Act shall apply
mutatis mutandis to the Corporation, unless otherwise provided
in this
Act.
(2) The debentures mentioned in Article 33 shall be deemed bonds pre-
scribed in Article 2 (1) 3 of the Securities and Exchange
Act.
CHAPTER NON-PERFORMING LOAN
RESOLUTION FUND
Article 38 (Establishment of Non-Performing Loan Resolution Fund)
The Non-Performing Loan Resolution Fund (hereinafter referred
to as the
"Fund") shall be established in the Corporation in order to efficiently dis-
pose of non-performing loan, etc. held by
financial institutions.
Article 39 (Creation of Fund)
(1) The Fund shall be created from the financial resources falling under
one of the following subparagraphs: 1. Deleted; 2. Funds transferred from the Corporation;
3. Contribution by the Government;
3-2. Contribution from the Public Capital Redemption Fund under the
Public Capital Redemption
Fund Act;
4. Funds raised from the issuance of the Non-Performing Loan Resolution
Fund Bonds;
5. Borrowings from the Bank of Korea;
6. Borrowings from the persons other than those mentioned in subpar-
ACT ON THE EFFICIENT DISPOSAL OF NON-PERFORMING ASSETS, ETC.
OF
FINANCIAL INSTITUTIONS AND THE ESTABLISHMENT OF KOREA ASSET
MANAGEMENT CORPORATION
18
agraph 5; and
7. Revenues from the operation of the Fund (including proceeds from
resolution of non-performing loans and disposal of assets subject
to
self-rescue plans) and others.
(2) Deleted.
(3) The Fund shall be deemed to have been designated as a government
agency pursuant to Article 77 (2) of the Bank of Korea Act
in case it
borrows funds from the Bank of Korea in accordance with paragraph (1)
5.
Article 40 (Issuance, etc. of Non-Performing Loan Resolution Fund Bonds)
(1) The Corporation may, with resolution of the Committee,
issue the
Non-Performing Loan Resolution Fund Bonds (hereinafter referred to as
the "Bonds") at the expense of the Fund in order
to raise funds neces-
sary for acquisition and disposal of non-performing loan.
(2) Matters necessary for the issuance of the Bonds
shall be prescribed
by the Presidential Decree.
(3) The extinctive prescription of the Bonds shall be five years for prin-
cipal, and two years for interest.
(4) The Government may guarantee the repayment of principal and in-
terest of the Bonds.
(5) Whenever the Corporation intends to issue the Bonds, it shall determine
the amount, terms, and method of issuance and redemption
thereof
and report to the Financial Service Commission thereon.
Article 41 (Management and Operation of Fund)
(1) The Corporation shall manage and operate the Fund.
(2) The Fund shall be used for the purpose of falling under each of the
following subparagraphs: Provided, That the funds under Article 39 (1)
4 and the money and proceeds derived from the resolution
of non-performing
loans from among revenues from the operation of the Fund under subparagraph
7 of the same paragraph shall not
be used for the purpose falling under
subparagraph 3-2:
1. Funds necessary for the acquisition of the non-performing loan of
financial institutions and the assets subject to self-rescue
plans for
ACT ON THE EFFICIENT DISPOSAL OF NON-PERFORMING ASSETS, ETC. OF
FINANCIAL INSTITUTIONS AND THE ESTABLISHMENT OF KOREA
ASSET
MANAGEMENT CORPORATION
19
the enterprises showing signs of insolvency prescribed by the Pres-
idential Decree: Provided, That the annual amount of funds to
be used
for the acquisition of the assets subject to self-rescue plans of the
enterprises showing signs of insolvency shall not
exceed that to be
used for the acquisition of non-performing loans of financial institutions;
2. Repayment of principal and interest of borrowed funds mentioned in
Article 39 (1) 5 and 6;
3. Repayment of principal and interest of the Bonds;
3-2. Lending money relating to the performance of services offered by
the Corporation
under Article 26 (1) 1-3, 5, 10 and 10-2;
3-3. Performance of an agreement concluded under the provisions of
Article 4 (3) of the
Public Capital Redemption Fund Act; and
4. Expenses for the management and operation of the Fund and others.
(3) The Corporation may, when it has surplus funds in the Fund,
manage
them in such manner as provided in Article 35.
Article 42 (Operation Plan, etc. of Fund)
(1) The Corporation shall draw up the annual operation plan with re-
spect to the total revenue and expense of the Fund and finalize
it through
resolution of the Committee before the commencement of each fiscal year.
(2) The Corporation shall prepare the closing
statement, balance sheet,
and income statement of the Fund within two months after the closing
date of each fiscal year, and report
them to the Committee before filing
them with the Financial Service Commission.
Article 43 (Accounting of Fund)
(1) The fiscal year of the Fund shall be same as that of the Government.
(2) The Corporation shall keep the accounting of the Fund
separately
from its accounting.
CHAPTER SPECIAL CASES FOR PRO-
MOTION OF DISPOSAL OF
NON-PERFORMING ASSETS
Article 44 (Special Cases concerning Requisite to Set up against As-
signment of Nominative Claim)
The Corporation shall, when it has completed the additional registration
of transfer of mortgage in its name with respect to the
registration of
creation of mortgage of the secured non-performing loan acquired pur-
ACT ON THE EFFICIENT DISPOSAL OF NON-PERFORMING
ASSETS, ETC. OF
FINANCIAL INSTITUTIONS AND THE ESTABLISHMENT OF KOREA ASSET
MANAGEMENT CORPORATION
20
suant to Article 26 (1) 1, be deemed to have fulfilled requisite to set up
against it pursuant to Article 450 of the Civil Act.
Article 45 (Special Cases concerning Furnishing Security for Auction)
The Corporation may, when it intends to be a bidder at an
auction pro-
cedure under the Civil Execution Act, or to be a bidder on behalf of the
financial institution which has entrusted
with the collection of credits
in order to perform the service mentioned in Article 26 (1) 1, furnish
its certificate of payment
assurance as security, notwithstanding Arti-
cle 113 of the Civil Execution Act.
Article 45-2 (Special Cases concerning Notice and Service of Auction)
(1) In the auction proceedings (limited to proceedings for
the enforce-
ment of security right) under the Civil Execution Act, of which proceedings
are initiated by the court through the
filing under one of the following
subparagraphs, notice or service requirements shall be satisfied when it
is sent by the court
to an address (if it is different from an address on
the resident registration card under the Citizen Registration Act, including
the latter; and if an address is reported to the court, referring to the
reported address) recorded on the registry book, at the
time of application
for such auction. When no addresses are available, the requirements shall
be satisfied in a manner of service
by publication:
1. Corporation as a creditor or an authorized person to collect the
claim in the performance of its services described in Article
26 (1);
2. Financial institutions described in subparagraph 1 (a) through (g)
of Article 2;
3. Branch offices or agents of a foreign financial institution which is
given authorization under Article 58 (1) of the Banking Act;
4. Deleted; 5. Insurance companies under the Insurance Business Act;
6. Mutual savings banks under the Mutual Savings Banks Act;
7. Credit guarantee fund under the Credit Guarantee Fund Act;
8. Specialized credit financial business companies under the Specialized
Credit Financial Business Act; and
9. Technology credit guarantee fund under the Korea Technology Credit
Guarantee Fund Act.
lose their effect on and after July 1, 2006, pursuant to Article 2 of the
Addenda of Act No. 7526, May 31, 2005>
(2) With respect to the auction proceedings described in paragraph (1),
one party falling under any subparagraph of paragraph (1)
shall give a
notice regarding details of the scheduled auction to the address of the
concerned debtor and owner registered in the
registry book of the real
estate (if the address is different from one on the resident registration
card under the Citizen Registration
Act, including the latter) before
applying for auction. In this case, the service requirement shall be sat-
isfied once the notice
has been sent.
[This Article Newly Inserted by Act No. 5978, Apr. 30, 1999]
Article 45-3 (Special Cases concerning Acquisition of Real Estates)
Real estates acquired by the Corporation during the course of its services
under Article 26 (1) shall not be subject to Articles
3 and 4 of the Act
on Special Measures for the Registration of Real Estate.
[This Article Newly Inserted by Act No. 5978, Apr. 30, 1999]
Article 46 (Tax Assistance, etc.)
The State or local governments may afford tax assistance necessary for
performing the services of the Corporation.
CHAPTER SUPPLEMENTARY PROVISIONS
Article 47 (Supervision)
The Financial Service Commission shall supervise the services of the
Corporation, and may issue orders necessary for such supervision.
(1) The Financial Service Commission may, when it deems necessary, have
the Corporation report the matters concerning the services,
accounting,
properties, etc. of the Corporation, or have the employees belonging to
itself or to the Governor of the Financial
Supervisory Service examine
the service status, books, documents, facilities, or other necessary objects
thereof.
22
(3) Any person who conducts the examination mentioned in paragraphs (1)
and (2) shall produce a certificate indicating his authority
to examine
to the concerned persons.
CHAPTER PENAL PROVISIONS
Article 49 (Penal Provisions)
(1) Any person who violates Article 25 (3) shall be punished by impris-
onment for not more than two years or by a fine not exceeding
ten mil-
lion won.
(2) Any person who violates Article 13 shall be punished by a fine not
exceeding five million won.
Article 50 (Legal Fiction as Public Officials in Application of Criminal Act)
Members provided in Article 15 (1) 3 through 8 and
the officers of the
Corporation shall be deemed public officials in application of Articles 129
through 132 of the Criminal Act.
Article 1 (Enforcement Date)
This Act shall enter into force three months after the date of its prom-
ulgation.
Article 2 (Operation Period, etc. of Fund)
(1) The raising of the financial resources of the Fund under the provi-
sions of Article 39 (1) 2, 3, 3-2, and 4 through 6 may be
made not later
than November 22, 2007 only for the redemption of bonds already issued
for resolving the non-performing loans of
financial institutions, and the
raising of the financial resources under the provisions of Article 39 (1)
7 may be made from November
23, 2002 until the date on which the op-
eration period of the Fund under the provisions of paragraph (4) is to
be completed.
23
22, 2012.
(6) Necessary matters relating to detailed criteria on the disposition,
time, procedures, methods, etc. in settling the Fund pursuant
to para-
graph (5) shall be prescribed by the Presidential Decree.
Article 3 (Establishment Committee)
(1) The Minister of Finance and Economy shall organize an establish-
ment committee by commissioning not exceeding ten persons within
one
month from the date of promulgation of this Act, and have them perform
the affairs relating to the preparation of establishment
of the Corporation.
(2) The establishment committee shall formulate the articles of incor-
poration of the Corporation, and obtain
the authorization thereof from
the Minister of Finance and Economy.
(3) The establishment committee shall make a registration of establish-
ment of the Corporation when the establishment committee
obtains the
authorization pursuant to paragraph (2).
(4) The establishment committee shall, when it completes the establish-
ment registration of the Corporation pursuant to paragraph
(3), hand over
its affairs and properties to the president of the Corporation, and the
establishment committee members shall be
deemed to be discharged from
the committee when they completely transfer them.
Article 4 (Dissolution of Ex-Corporation)
ACT ON THE EFFICIENT DISPOSAL OF NON-PERFORMING ASSETS, ETC. OF
FINANCIAL INSTITUTIONS AND THE ESTABLISHMENT OF KOREA ASSET
MANAGEMENT
CORPORATION
24
The ex-Corporation established under Article 53-3 of the Korea Develop-
ment Bank Act shall be deemed to have been dissolved as
of the date
of the establishment registration of the Corporation pursuant to Article
3 of this Addenda.
Article 5 (Succession of Properties, and Rights and Obligations)
(1) The Corporation shall collectively succeed all properties,
and rights
or obligations belonging to the ex-Corporation established under Article
53-3 of the Korea Development Bank Act at the
time of enforcement of
this Act.
(2) The value of the properties which the Corporation succeeds pursuant
to paragraph (1) shall be their book value at the time of
succession.
(3) The actions conducted by the ex-Corporation established under Ar-
ticle 53-3 of the Korea Development Bank Act
in accordance with the rel-
evant Acts and subordinate statutes before the enforcement of this Act
shall be deemed to have been
conducted by the Corporation.
Article 6 (Transitional Measures on Investment by Korea Development
Bank)
(1) The properties which the Korea Development Bank had invested into
the ex-Corporation established under Article 53-3 of the Korea
Devel-
opment Bank Act before the enforcement of this Act shall be deemed
those which the Korea Development Bank has invested into
the Cor-
poration pursuant to Article 9 (4).
(2) The reserves held by the ex-Corporation before the enforcement of
this Act shall be deemed the profits accrued from investment
by the
Korea Development Bank pursuant to paragraph (1), and may be trans-
ferred into the capital of the Corporation in such a
manner as prescribed
by the Presidential Decree.
Article 7 (Expenses for Establishment)
The Corporation shall bear the expenses for its establishment.
Article 8 (Transitional Measures on Officers and Employees)
(1)
The officers of the ex-Corporation established under Article 53-3 of
the Korea Development Bank Act at the time of enforcement of
this Act
shall be deemed those appointed under this Act. In this case, the terms
of office of the officers shall comply with the
previous provisions, and
shall commence from the date on which they are appointed under the pre-
vious provisions.
(2) The employees of the ex-Corporation established under Article 53-3
of the Korea Development Bank Act at the time of enforcement
of this
Act shall be deemed to have been appointed as those of the Corporation.
ACT ON THE EFFICIENT DISPOSAL OF NON-PERFORMING
ASSETS, ETC. OF
FINANCIAL INSTITUTIONS AND THE ESTABLISHMENT OF KOREA ASSET
MANAGEMENT CORPORATION
25
Article 9 Omitted.
ADDENDA
(1) (Enforcement Date) This Act shall enter into force on April 1, 1998:
Provided, That the amended provisions of subparagraph 3
of Article 39
and Article 41 shall enter into force on the date of its promulgation.
(2) (Transitional Measures on Disposition,
etc.) Authorization and other
actions executed by administrative agencies, etc. or various declaration
and other actions made thereto
under the previous provisions at the time
of enforcement of this Act shall be regarded as the actions executed thereby
or made
thereto under this Act.
(3) through (5) Omitted.
ADDENDUM
This Act shall enter into force on the date of its promulgation.
ADDENDA
Article 1 (Enforcement Date)
This Act shall enter into force on the date of its promulgation.
Article 2 (Transitional Measures following Change of Corporate
Name)
(1) The ex-Corporation existing as of the enforcement of this Act shall
be deemed the Korea Asset Management Corporation
under this Act.
(2) Any act or other legal relation performed or established under the
name of the ex-Corporation at the time of
enforcement of this Act shall
be deemed to be done under the name of the Korea Asset Management
Corporation under this Act.
(3) The name of the ex-Corporation on any registry or other public books
at the time of enforcement of this Act shall be deemed
the name of the
Korea Asset Management Corporation under this Act.
Article 3 (Amendments to Other Acts)
(1) through (11) Omitted.
(12) The Act on the Efficient Disposal of Non-Performing Assets, etc. of
Financial Institutions and the Establishment of Korea Asset
Manage-
ment Corporation or the ex-Corporation cited by other Acts and subordi-
nate statutes at the time of enforcement of this
Act shall be deemed the
Act on the Efficient Disposal of Non-Performing Assets, etc. of Financial
Institutions and the Establishment
of Korea Asset Management Corporation
or the Korea Asset Management Corporation under this Act in lieu thereof.
ACT ON THE EFFICIENT
DISPOSAL OF NON-PERFORMING ASSETS, ETC. OF
FINANCIAL INSTITUTIONS AND THE ESTABLISHMENT OF KOREA ASSET
MANAGEMENT CORPORATION
26
ADDENDA
Article 1 (Enforcement Date)
This Act shall enter into force on the date of its promulgation.
Article 2 Omitted.
ADDENDA
Article 1 (Enforcement Date)
This Act shall enter into force on July 1, 2002.
Articles 2 through 7 Omitted.
ADDENDUM
This Act shall enter into force on the date of its promulgation: Provided,
That the amended provisions of Article 39 (1) 3-2 shall
take effect on Jan-
uary 1, 2003.
ADDENDA
Article 1 (Enforcement Date)
This Act shall enter into force on January 1, 2004.
Article 2 Omitted.
ADDENDA
Article 1 (Enforcement Date)
This Act shall enter into force on the date of its promulgation.
Article 2 (Valid Period)
The provisions of Article 45-2 (1) 2 through 9 shall be valid until and
by June 30, 2006.
Article 3 (Application Examples regarding Special Examples of Auction
Procedure Conducted by Application from Financial Institutions,
etc.)
The provisions of Article 2 of the Addenda shall begin to apply from the
case applied for auction for the first time after
the enforcement of this
Act.
Article 4 (Transitional Measures regarding Cases Which Have Already
Been Applied for Auction)
The cases applied for auction on or before December 31, 2004 under the
previous provisions of Article 45-2 (3) shall be governed
by the previous
provisions.
ACT ON THE EFFICIENT DISPOSAL OF NON-PERFORMING ASSETS, ETC. OF
FINANCIAL INSTITUTIONS AND THE ESTABLISHMENT OF KOREA ASSET
MANAGEMENT
CORPORATION
27
ADDENDUM
This Act shall enter into force six months after the date of its promul-
gation.
ADDENDA
Article 1 (Enforcement Date)
This Act shall enter into force on July 1, 2006.
Articles 2 through 6 Omitted.
ADDENDA
Article 1 (Enforcement Date)
This Act shall enter into force on the date of its promulgation.
Articles 2 and 3 Omitted.
ADDENDUM
This Act shall enter into force on the date of its promulgation.
ADDENDUM
This Act shall enter into force on the date of its promulgation.
ADDENDA
Article 1 (Enforcement Date)
This Act shall enter into force on the date of its promulgation. (Proviso
Omitted.)
Articles 2 through 7 Omitted.
ADDENDA
Article 1 (Enforcement Date)
This Act shall enter into force on the date of its promulgation.
Articles 2 through 5 Omitted.
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