Korea Deposit Insurance Corporation (KDIC) will resell claims and equity tied to the Cambodia "Camko City" development, which was the cause of the Busan Savings Bank bankruptcy. KDIC is reportedly set to recover about 700 billion won, including principal and interest, from the Camko City sale.
On the 3rd, according to the financial sector, KDIC began the process of selecting a legal adviser to sell asset related to Camko City. The assets for sale include all claims and equity held in the Camko City project by five Busan Savings Bank affiliates and Landmark Worldwide Co., Ltd.
This marks the first full-scale sale process in 15 years since KDIC, as bankruptcy trustee, took over following the Busan Savings Bank collapse. To that end, the head of KDIC's Cambodia office recently attended a board meeting and reported on the status of the Camko City project and local conditions.
The Camko City project is a development to build commercial and residential facilities covering 1.32 million square meters (about 400,000 pyeong) near Phnom Penh, the capital of Cambodia.
"World City," which led the Camko City project, borrowed 236.9 billion won from the Busan Savings Bank group starting in 2005 to carry out the project. The bank's reckless project financing (PF) investments led to its bankruptcy, halting the project, and Busan Savings Bank, which had invested hundreds of billions of won, went bankrupt in 2012.
As bankruptcy trustee, KDIC subsequently took over equity, claims, and other rights related to Camko City from Busan Savings Bank. KDIC did not recover a little over 670 billion won in loan principal and interest from the World City side. Including delayed interest, KDIC is estimated to have more than 700 billion won to recover.
Among those who had deposits at Busan Savings Bank, 38,000 people exceeded the deposit insurance limit of 50 million won or invested in subordinated bonds and were unable to get their money back. A person surnamed Lee, an operator of World City, was sentenced in 2024 to four years in prison on charges of embezzlement and breach of trust under the Act on the Aggravated Punishment, etc. of Specific Economic Crimes.
KDIC also moved to sell Camko City last year, but paused the effort due to local circumstances and the government's stance halting the sale of state-owned assets. KDIC recently resumed the sale process in consultation with the government.