South Korea will come up with pan-governmental measures to retrieve the 650 billion won (US$542.12 million) locked in a new city development project in Cambodia.
The loans were extended to a South Korean entrepreneur by now bankrupt Busan Savings Bank. The project, dubbed Camco City project, failed in 2010 due to a lack of demand for commercial facilities. Camco City means Cambodia and Korea City.
The government and the ruling Democratic Party held a policy consultation meeting on Sept. 25 to discuss measures to normalize the Camko City project in Phnom Penh, the capital of Cambodia. Participants in the meeting included officials from the Korea Deposit Insurance Corp. (KDIC), the ruling party, the Office of the Prime Minister, the Financial Services Commission, the Ministry of Foreign Affairs and the Prosecution and the police.
It was the first time for the Korean government to discuss measures for collect loans tied down in the property development project in Cambodia.
The participants decided to ask the Cambodian government to arrest and repatriate the CEO of World City, a Korean surnamed Lee, who is on the Interpol's Red Corner Notice list. World City is the company set up by Lee to promote the Camko City project.
To promote the project, Lee took out a huge loan from Busan Savings Bank Group. He borrowed 236.90 billion won (US$197.58 million) from Busan Savings Bank. However, the project was halted in 2010 due to a lack of demand for the commercial facilities developed. In the aftermath, Busan Savings Bank was declared bankrupt by a court in March 2012, creating a considerable number of victims. The state-run corporation filed a suit against Lee to take over his stake in World City as a means of retrieving the loans. The lawsuit has been ongoing in Cambodia for five years now. However, a Cambodian court ruled in favor of World City in a trial on the case in July.
KDIC needs to win the lawsuit to compensate the 38,000 people who are hurt by the bankruptcy of Busan Savings Bank. KDIC President Wi Sung-back visited Cambodia several times after taking office in September last year. He has shown a strong will to normalize the Camko City project.