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Government to probe savings banks

South Korea's state-run asset management corporation plans to conduct probes on real estate-related project financing operations under the control of local savings banks, a source said Saturday.
The Korea Asset Management Corp. (KAMCO) source said 386 project financing projects are to be checked, as concerns have been raised about deteriorating conditions that can cause trouble for the lenders.

After detailed examination of such operations, KAMCO will decide whether to allow the injection of more funds or get insolvent businesses to close down, the source said, without elaborating.

The asset corporation said that it plans to get parliamentary approval for 3.5 trillion won (US$3.1 billion) in restructuring money so it can buy up shares in shaky project financing projects.

KAMCO has spent more than 6.1 trillion won since 2008 to buy up bad stakes in such ventures, and it has sold off nine such companies with a further 27 operations waiting for new owners.

(Yonhap News)