• SHARE

The government announced Friday a new plan to establish schemes to help small and midsize companies rebuild their businesses by utilizing the trust function of Resolution and Collection Corp., the government’s loan collection entity.

RCC President Akio Kioi said the plan is designed to save salvageable small and midsize firms as banks move to speed up bad-loan disposals under the comprehensive economic package, which was announced Oct. 30.

The plan, revealed by the Financial Services Agency and RCC, comprises two schemes. The subject of the trust will be major banks’ bad loans to firms likely to go under.

Under one scheme, banks entrust loans to such firms to RCC and draw up reconstruction plans, while RCC gives advice and checks the validity of the plans as a third party.

“When many ordinary people wonder if reconstruction plans made by major banks and problematic companies are appropriate, RCC can give neutral opinions on the plans,” Kioi said.

The other scheme requires RCC to be more actively involved in the reconstruction of small and midsize firms. RCC is entrusted with or purchases loans to problematic firms from nonmain banks and creates and implements rehabilitation programs in cooperation with their main banks.

RCC holds loans from three to five years. If companies cannot start reviving within that period of the time, their loans will be sold to RCC, meaning the firms will likely go bankrupt.

Kioi said the schemes will be effective to help revive firms because the firms can maintain relations with creditor banks, which means that the firms may receive loans from the banks.

To reinforce its operations for corporate rehabilitation, RCC will increase the number of its officials from the current 130 to 150 as soon as possible, and invite about 25 experts — 15 officials from banks, seven accountants and a few tax accountants.

The entity will also deploy officials who will specialize in corporate revival at its 43 outlets around the nation.

In a time of both misinformation and too much information, quality journalism is more crucial than ever.
By subscribing, you can help us get the story right.

SUBSCRIBE NOW