The scope of assets that the Credit Union (Shinhyup)'s nonperforming loan (NPL) specialist subsidiary can purchase and resolve will be expanded.
The Financial Services Commission prepared and on the 5th pre-announced legislation for a draft amendment to the Credit Unions Act enforcement decree that specifies the scope of assets purchasable by the Shinhyup Asset Management Company, which handles NPL resolution for Shinhyup. The amendment is intended to specify matters delegated by law following the revision of the Credit Unions Act.
The amendment defines the scope of non-business assets that the Shinhyup Asset Management Company may purchase as follows: ▲ assets acquired by cooperatives, the central association, or central association investee companies due to nonperforming loans ▲ fixed assets that must be disposed of pursuant to management control and financial condition improvement measures ▲ fixed assets that are no longer used for operations due to mergers, business transfers, or contract transfers.
The acquisition price for distressed assets will be calculated based on objective prices such as appraisal values from appraisal corporations, while considering senior claims, property rights, and leasehold rights. If it is difficult to determine the price in advance, the difference between the acquisition and disposal prices may be settled afterward.
The criteria for appointing standing auditors at Shinhyup were also specified. Cooperatives required to appoint a standing auditor are defined, similar to before, as regional or group cooperatives with total assets of 300 billion won or more. Among religious organizations, incorporated associations, and occupational group cooperatives, those that meet certain requirements may forgo appointing a standing auditor.
Cooperatives that may optionally appoint a standing auditor are defined as regional or group cooperatives with total assets of at least 200 billion won but less than 300 billion won, or cooperatives that the board deems necessary for purposes such as prudential management, strengthening internal controls, and preventing financial accidents.