Chairman Moon Chang-yong of Korea Asset Management Corp.(KAMCO). (Photo: KAMCO)

Korea Asset Management Corporation (KAMCO) will look at revising the KAMCO Act so it can actively assist troubled but viable small- and medium-sized enterprises (SMEs).

It plans to do that by normalizing their business through revisions to related regulations, Chairman Moon Chang-yong said July 18.

“KAMCO’s role should be expanded at a time when economic uncertainties are growing and the economic slowdown continues.”

KAMCO Chairman Moon said in a press conference at the Korea Press Center in Seoul to back up his claim that the law should be revised to allow KAMCO to help SMEs with great potential to be persistent and continue running.

“State-run banks can assume the restructuring of conglomerates and KAMCO can do this for SMEs.” he said.

“We are seeking to reflect KAMCO's developed role and function in regulations, and create legal grounds for projects to assist businesses in normalizing operations.” he said.

Under a law established in 1997, KAMCO’s role is defined as “temporarily managing funds to settle non-performing loans and seeking soundness of financial institutions, to overcome financial crisis.”

The revisions to the law were proposed in November last year.

They seek to include assisting the recovery of financial entities and increasing the value of public property in KAMCO’s role.

The revisions also seek to increase the amount of KAMCO’s capital from 1 trillion won to 3 trillion won, considering it would need a greater amount of funds to be able to assist troubled financial entities.

“The revisions will help the restructuring of SMEs as they will provide a legal system to KAMCO to help the SMEs in trouble to normalize their operations.” Moon said.

The chairman also said KAMCO will begin a debt rescheduling program for guarantors of corporate bonds this year by alleviating their debt burdens.

This is part of measures the Financial Services Commission pledged to take to support the self-employed last year.

KAMCO, established in 1962, is a quasi-government agency that resolves distressed financial assets and provides corporate restructuring efforts.

In his inaugural speech at a ceremony on Nov. 18 at the Busan International Financial Center, Chairman and CEO Moon Chang-yong of Korea Asset Management Corp. (KAMCO) said he would jumpstart the organization’s ability to take over bad loans from financial institutions.

The new CEO said KAMCO will reform the system to revive the financial strength of the general public by taking advantage of its know-how in managing the National Happiness Fund while making its relationship with the Korea Inclusive Finance Agency strong.

KAMCO will take over bad loans from financial institutions as rapidly as possible to safeguard their sound operations and expand its moves to support the recovery of the health of individual credit.

Moon also called on KAMCO to participate in the capital market in coordination with civilian sector financial firms and supplement the civilian defaulted asset market.

He also said KAMCO should participate in the corporate restructuring so that it would become the sole financial organization to take care of public debts in default by taking over the job of the restructuring public default debts from the policy financial organizations like the Korea Technology Credit Guarantee.

Moon also said the restructuring of the shipbuilding, maritime industry and SMEs should be expedited as the linchpins of the national economy.

He added that he would like to see KAMCO making huge contributions to the national economy by vitalizing the redevelopment of the old public real estate pieces to pave the way for increased public sector earnings and advancing the management system for state- and public-owned assets.