Seoul Suspends 5 More Merchant Banks

Struggling to shore up its ailing economy, South Korea suspended five more shaky finance companies and announced measures to induce foreign investment. “The government expects that the measures will help ease spreading concern in the financial market,” Finance Minister Lim Chang Yuel said. But analysts said the measures, expected for days, may fall short of expectations. In accepting the International Monetary Fund’s record $57-billion bailout last week, Seoul agreed to overhaul its inefficient finance industry and drastically open its stock market to foreigners. The central Bank of Korea, which has said it will intervene to smooth the market’s operations, offered to sell dollars for settlement. Stocks soared in early trading after the Finance Ministry said it would lift the aggregate and individual foreign shareholding limits to 50% from Thursday instead of on Dec. 15, as earlier announced. Nine merchant banks were suspended last week and have until the year-end to improve their financial structure.