South Korea considers U-turn over foreign direct investment

The South Korean government is formulating a plan to permit foreign direct investment (FDI) as it looks to the sale of stakes in state-held companies including Daewoo Shipbuilding and Marine Engineering (DSME) and Korea Aerospace Industries (KAI).

Kim Dong-soo, head of the Ministry of Knowledge Economy's business investment policy bureau, confirmed to Jane's on 19 February that the plan would be submitted to government shortly. "The economic situation is not so good but we are looking at the sale of a number of companies," he said. "We have not decided about the details of the sale, we have no list of specific companies and there are no deadlines yet."

Such a move would mark an abrupt change in South Korean policy.

The country's official news agency Yonhap had previously reported that the formation of the plan - which outlines a project to sell stakes in companies that received bailout funds during the 1997-98 Asian economic crisis - was approved by government on 13 February.

A total of 14 companies received such funds in the late 1990s, including DSME and KAI, the latter being the result of a merger between the aerospace divisions of Samsung, Hyundai and Daewoo. 197 of 548 words