Going forward, the government will in principle ban selling government assets at prices below the appraised value. When selling equity in public institutions held by the government or public agencies, prior consent from the competent National Assembly standing committee will be mandatory.
The Ministry of Economy and Finance on the 15th announced a plan to improve the government asset sale system. This is a follow-up measure to President Lee Jae-myung's instruction on Nov. 3 to "halt all government asset sales, and fully reexamine asset sales currently underway or under review before deciding whether to proceed."
To fundamentally block disputes over fire-sale disposals, the government will in principle prohibit discounted sales of assets. However, in unavoidable cases such as prolonged delays in sales, the discount rate will be set after prior resolution by the State Property Policy Deliberation Committee.
◇ Establishing a specialized review body for sales… strengthening sales procedures by amount
Each ministry will establish a specialized asset sale review body centered on outside experts. A government official said, "Each ministry will use expert-centered review bodies to examine the validity of asset sales and the appropriateness of prices."
Sales procedures will also be greatly strengthened. Previously, asset sales were possible with only the approval of the director of the General Affairs Division in each ministry and the agency's board of directors, but going forward, sales criteria will be systematized by amount.
First, when the asset for sale is 1 billion won or more, issuance of a review certificate by the Korea Association of Property Appraisers will be mandatory to verify the appropriateness of the appraised value. Assets of 5 billion won or more must be reported to and resolved by specialized sales review bodies such as the State Property Policy Deliberation Committee, and assets of 30 billion won or more must be reported in advance to the National Assembly standing committee after going through the Cabinet meeting.
In particular, assets of 30 billion won or more must go through all three procedures: issuance of a review certificate, reporting to and resolution by the sales review body, and reporting to the National Assembly standing committee.
Disclosure of sales information will also be strengthened. As soon as the government decides to sell an asset, it plans to disclose bidding information on Onbid, the electronic bidding site for public assets.
◇ Privatization of public institutions not allowed without National Assembly consent… discounted sale notices to revert to appraised value
Privatization of public institutions will also become impossible without National Assembly consent. When selling equity held by the government or public agencies, a prior consent procedure by the competent standing committee will be introduced, and related laws will be revised so the National Assembly can thoroughly review privatization in advance.
For assets that have failed to sell at least twice and for which discounted sales are underway, the government plans to resume sales at the appraised value instead of a discount. Regarding state assets already sold, it said, "There are legal issues, so it is difficult to comment at this stage," but added, "We will check whether the contracts were executed lawfully."
A government official said, "For assets that do not sell, the intent is to allow discounted sales as an exception after going through an expert-centered sales review committee," adding, "We will actively utilize state property with high utility value, and rationally sell assets with low utility."
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