SEOUL, South Korea — E.J. Woo, chief executive officer of troubled Korean DRAM maker Hynix Semiconductor Inc. condemned the Commerce Department's final decision to set tariffs on imports of Korean DRAMs as an, "outrageous act aimed at a hidden agenda."
The final ruling of 44.7 percent tariffs was reduced from the preliminary figure of 57.4 percent (see June 17 story) but Woo said Hynix expects the World Trade Organization to quash the tariffs as unfair if they were not thrown out by a U.S. International Trade Commission (ITC) review.
The ITC is set to determine whether U.S. petitioner, Micron Technology Inc., has been hurt by competition from South Korea that has now been judged to have been supported by illegal subsidies.
Referring to the U.S. tariffs themselves as subsidies Woo said: "It was absolutely clear from the facts of this case that these subsidy levels are unjustified and illegal."
"The only possible explanation is that the DOC has decided to use this case to pressure the Korean government on the question of economic restructuring," Woo said in a statement issued Tuesday (June 17) after the ruling.
"The Commerce Department has blindly concluded that the Korean government must have been secretly involved in the financial restructurings of Hynix simply because the Korean government still owns shares in some commercial banks. Commerce wrongly ignored testimony from numerous experts that the Korean Government cannot control private banks' decision-making," Woo said.
"The DOC seems to believe that the Korean government wants to maintain its bank shareholdings, and that punishing Hynix will change the situation. That is also wrong. The government is trying hard to find buyers for its bank shareholdings," Woo commented.
"Today's decision further ignores the leadership role Citibank played in the Hynix restructuring. If the DOC followed U.S. law, it would acknowledge that Citibank and other private banks, banks without any government ownership, should be the benchmark for measuring the true commercial nature of the overall restructuring."
"Finally, the U.S. decision unfairly condemns the use of out-of-court workouts, rather than bankruptcy. American-style bankruptcy is not the only way to handle troubled companies." Woo continued: "Most of the world, like Korea, tries to use creditor-led workouts to avoid unnecessary bankruptcies, which often lead to liquidation and huge economic dislocation."
"Freed from political pressure and hidden agendas, the DOC's determination cannot survive court or World Trade Organization scrutiny. More importantly, we are confident that the independent and objective market evaluation of the U.S. International Trade Commission will put an end to this case without the need for more wasteful legal conflict," Woo concluded.
