"The $375 million (about 420 billion won) out of the $750 million facility funds (about 840 billion won) that are to be invested in GM Korea may not be provided," said Lee Dong-geol, president of Korea Development Bank (KDB). In this case, the contract for normalization of management between KDB and GM, which promised not to withdraw from the Korean market for the next 10 years, could be scrapped.
On the GM Korea's separation of its corporation, KDB head Lee said at a parliamentary inspection held at IBK in Eulji-ro, Seoul, "I think it is desirable to implement the remaining amount of the facility funds to be invested in GM Korea at the end of the year, but if it is opposed nationally, we may not do it."
Under the managerial normalization agreement signed with GM in May, the KDB invested half of the $750 million in June, while the rest were to be invested by Dec. 31.
"If we don't implement $375 million, the basic contract with GM will be terminated and GM will be able to withdraw at any time after that. It is required to execute $375 million and complete the basic contract so that GM can maintain its production plan and invest in facilities for 10 years," Lee explained.
Lawmakers of the ruling and opposition parties called the incident the "second Lone Star incident" and criticized the KDB for its poor response.
Rep. Yoo Dong-soo of the ruling Democratic Party of Korea said, "I think KDB was able to grasp the GM's intention to create an R&D company in April. Questions are being raised about the KDB's pre-emptive effort to include the division of the company as a key management decision during the subsequent settlement process."