Solve the problem

Finally, reform is in the works for the Chaebols and their

corporate governance.
There are mainly 5 necessary changes in the management of
Chaebol as follows:
• improve transparency in management;
• improve capital structure;
• improve the accountability of property managers;
• cancellation of mutual loan guarantees between Chaebol
branches;
• business consolidation into core competence areas.
In 1999, the government added three more rules that Chaebol
must follow:
• prevent industrial capital from dominating finance;
• discourage revolving investment between Chaebol branches;
• prohibit the transfer of management or ownership rights by
nepotism
for family heirs These structural changes reflect two long-term
political goals in the post-war era
crisis: the first goal is to move the Korean economy towards a
free economy, more market-oriented, and the second goal is to
strengthen resilience to market fluctuations in the financial
sector.
Chaebols are forced to change, especially from the point of view
of the public who always see them as .

(hệ quả) The main cause of the crisis was their prudent lending
and expansion. According to the IMF, the main reason for the
crisis was low profits, the result of investment over- and over-
invested in industries such as shipbuilding, automobiles,
electronics and semiconductors. The proposed solution to this
problem is to eliminate excess production capacity, due to that,
removing some plants and equipment; and injecting state budget
to adjust capital for Chaebols in exchange for ending the
practice of guaranteeing mutual debt between branches of
Chaebol .One of the main goals of the government is to reduce
the debt ratio. However, the government want to achieve this
goal by all means, reduce it to less than 200% in time shortest
possible. This has led the government to use the wrong tactics
such as revolving investment. Revolving investment occurs
when company A invests in B, and B invests in C, C invest in B,
and B invest in A. In this way, there is no actual investment is
done, but capital seems to have increased on the books. This can
be
giving Chaebol holders greater power and control and once
again the shareholders
minorities will be ignored. In the end these reforms did not work
as expected and failed for a number of reasons, such as the
existence of revolving ownership as mentioned earlier, which
gives
ambiguities and complexity, or weak regulatory enforcement.
Basically, the change in Chaebols is only on the surface, but the
structure remains the same because of dependencies between
units and clan control remained strong. Samsung Group has a
delivery rate translation between the highest units. In 1997, 159
Samsung units reported a total of revenue reached 148.17 trillion
Won, of which 61.73 trillion Won, or 41.7%, was from insider
transactions. Internal transactions of Hyundai group stood at
38.1%, continuing followed by LG group at 38.0% and SK
group at 36.1%. Due to the failure to restructure the Chaebol, the
government had to consider other means to save the economy.
That's why the government issues government bonds worth 64
trillion Won is used to settle bad debts and restructure financial
institutions. Ultimate background The economy remains
unstable because of the lack of investment companies,
commercial banks or trading agents domestic securities
business. The situation got worse with the collapse of the
corporation Daewoo. The reason is that all financial institutions
are linked in some way to This chaebol. The collapse of Daewoo
Corporation has created debts estimated at 90 trillion won. As a
result, a series of financial institutions fell into insolvency as it
did during the IMF crisis. The disaster happened because of the
failure to close the door immediately Daewoo Group after the
IMF Crisis