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  • 승인 2005.04.01 12:01
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Tokyo Insolence Stop Provocation for the Sake of Bilateral Relations Words fail to describe how wily Tokyo has been in manipulating the Tokto (Dokdo) issue since it triggered disputes by laying claim to South Korea easternmost islets. Once again, Tokyo has provoked Seoul with its education minister saying March 29 that Japanese students should be taught that Tokto belongs to their country. His remarks caused a re-flaring of the disputes over the rocky islets that had begun to recede after the leaders of the two neighboring countries indirectly agreed to meet and discuss the issue. On March 25, Japan Prime Minister Junichiro Koizumi proposed a summit with President Roh Moo-hyun at an early date to discuss the issue, which has severely eroded relations between Seoul and Tokyo. Koizumi offered the summit after President Roh lashed out at Tokyo Wednesday for attempting to take over Tokto, calling it a Japanese move to justify its occupation of the Korean peninsula. In return, Roh said that he would meet with Koizumi before June. The latest provocation is yet more evidence that Tokyo is behind these claims to Tokto, in total disregard of a clutch of historical documents, including some written by Japanese scholars, confirming that the island belongs to the peninsula. Tokyo has turned a deaf ear to Seoul demand that "Takeshima Day, which Shimane Prefecture designated on March 16 laying claim to Tokto, be abolished on the grounds that it can intervene in affairs of a provincial administration. But its argument was betrayed by its ambassador to Seoul who said Tokto is his country territory hours after the Shimane prefectural council forwarded the bill for the designation of Takeshima Day at the end of February. The sincerity of Koizumi call for a summit with President Roh was also cast into doubt as Japan envoy in the United States placed an article in the Washington Post claiming his country sovereignty over Tokto. Tokyo insolence seems to know no bounds as it protested the visit by Korean tourists to Tokto on March 29. This incredible protest constitutes nothing more than intervention by Tokyo in Seoul internal affairs. It is beyond imagination that Tokyo insists on its ownership of the island based on imperial Japan occupation of it in 1905, taking advantage of the peninsula powerlessness. Tokto should have been returned to Korea when Japan surrendered unconditionally in August 1945. We sincerely hope that Tokyo will refrain from activities infringing on Seoul sovereign right over Tokto for the sake of bilateral relations. That is the first step Japan should take if it is really repents the atrocities it committed during its 36-year occupation of the peninsula. Foreigners Overreaction Investors Need to Be Transparent As Well The London-based Financial Times (FT) harshly criticized Korean financial regulators perceived hostility towards foreign investors in three articles on March 31. Borrowing the words of anonymous sources, the paper called Seoul ishonest, ypocritical, and even chizophrenic. The latest bone of contention: a rule that requires investors acquiring more than 5 percent of Korean companies to disclose investment purposes and sources of funding. However, the so-called 5-percent rule has long been in practice in the U.S. and Japan, which are reportedly considering even tougher measures for stabilizing management control. Korea has just been, albeit belatedly, awakened to this need. The FT also said Seoul hurriedly worked out the scheme to discriminate against foreigners. However, the Financial Supervisory Commission refutes this accusation saying that the legislation is the result of a year of study and surveys, and applies to domestic investors, too. The proposal of the FSC head to fill at least half the seats on corporate boards with local directors is similarly modeled after the practices of some European countries. Regulations such as these are apparently new to foreign investors. But they are neither unique to Korea, as some expatriates claim, nor likely to hinder the maximization of profits and exercise of shareholders rights - provided these transactions are made in a fair, transparent manner, as the foreigners would demand of the firms in which they invest. There have been cases that have aroused regulatory suspicion in this regard. U.K.-based Hermes Investment Management, for instance, bought 5 percent of the shares of Samsung Corp., spread a rumor about an impending M&A and then sold off its holdings at sharply higher prices, garnering huge profits. Few could say this is a justifiable realization of profits. Bahrain-headquartered Sovereign Asset Management, which tried to oust SK Corp. chairman, also had not made clear the purpose of its investment was to participate in the management of the oil refiner. No Korean would deny the contribution of foreign investors to the nation quick recovery from the 1997-98 financial crisis. Korea, which relies on foreign trade for 70 percent of its GDP and where foreigners own 42 percent of locally listed stocks, still needs foreign investors badly. It is also true that the presence of foreign investors considerably helped to reform the opaque governance structure of Korean chaebol as well as their reckless expansion through accounting irregularities and cross holding of affiliates shares. Still, Seoul should not be blamed for trying to differentiate bona fide investors from speculators. The key is how to create a level playing field for all investors with total disregard to their nationality. The government should strictly implement new rules and come up with more if necessary to prevent sharp practice, in a manner keeping with global standards. The goal of becoming a financial hub will hardly be realized simply by having ambitions toward that end, but it should not be sought at the expense of normal regulatory controls.

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