Monday, June 23rd, 2014
SEOUL, KOREA - Shin Je-Yoon, Financial Services Commission chairman, said on June 22, "I will make sure to root out the practice of credit rating firms taking business in exchange for good credit ratings to corporations." This followed a series of scandals in which Korea's top-three rating companies were caught colluding with corporations in determining credit ratings on their bonds.
The chairman said in a press conference, "The manipulation of credit ratings is a serious crime destroying the fundamental capital market system. My commission will do everything it can to prevent such incidents from happening again."
As part of the measure, the commission will strengthen penalties for wayward executives and managers of credit rating firms. Under the current law, punishment for credit rating firm employees in violation of internal rules is up to individual rating firms. A Financial Services Commission official said, "We will review a measure to bring this up to criminal charges."
The official added that the commission would improve the rules and regulations so that credit rating firms can make fair ratings without being swayed by corporate influence.
