KIC Sovereign Weath Fund Faces Questions Over Investable Capital
The strategic sovereign wealth fund of the Korea Investment Corporation (KIC), which promoted a capital of 16 trillion won (about $12.08 billion), is facing an ‘ammunition controversy’ ahead of its launch.Park Il-young, Chief Executive Officer of the Korea Investment Corporation (KIC), said that if
The Korea Investment Corporation (KIC) strategic sovereign wealth fund, which anticipated a capital of 16 trillion won ($12.08 billion), is facing questions over its investable capital. KIC Chief Executive Officer Park Il-young revealed that the 1 trillion won in immediate investable funds available are far from the 16 trillion won in state-run bank assets mentioned as total resources.
If projects exceed this 1 trillion won, Park stated he would consult the government for additional funding. Representative Kim Sang-hoon from the People Power Party criticized the lack of clarity in the investment resources and annual execution plan, with concerns over the feasibility of the 16 trillion won in state-run bank stakes and other assets.
Park explained the difference between available cash and initial capital, stating 500 billion won are immediately available, while the shares paid in kind need to be sold in stages. Kim questioned the selection of the KIC as the operating body, pointing out arguments against it being suitable and expressing concerns over the government deciding which companies to invest in.
Park defended the choice, stating the government deemed the KIC more efficient for the task. Establishing a firewall between foreign exchange reserves and the strategic investment account was another contentious issue, with Park acknowledging the need for new personnel to handle domestic strategic industries.
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