Korea | Sparrows Industry Communication

[Jay]

To: Sparrows Investment < Hollie > CC: ShinShinyoung@moef.kr.gov, ParkJooyoung@mofa.kr.gov, MinSooju@moj.kr.gov, HanSooyoung@bok.kr,

From: ChoJiwon@moef.kr.gov

Subject: [Outstanding Loan]

Security: Private and encrypted Protected by the NIS and MoFA DPB

Dear Mrs. Durand,

I hope this email finds you in good health. I am currently emailing you with regards to The Republic of Korea's loan taken through Sparrows Investment. As a major creditor and lender, we appreciate Sparrow's continued financial assistance and the Sparrow's conglomerates wider positive relations with Korea. In lieu of the current debt issues facing our country, we would like to have an open discussion regarding our 26 billion dollar loan. As one of Asia's major economies and a hub for Sparrow's lending alongside other major economies such as Australia and India, I understand the fears amongst your shareholders over another European Financial Crisis. I do understand these fears and hope that quick action through these conversations will limit any deep exposure to our country or your company with regards to economic growth and profit revenues respectively.

Our initial deal was signed under the conditions of the European Financial Crisis and a general concern over financial stability. With a mark up price of 30% appreciation rate on all loans handed out. Primarily loaning countries were major countries in Asia which, as a result of the higher appreciation rates above normal conditions of 20% have seen repayment take up considerable portions of their national budget. Korea included. The primary points of our discussion are to understand the current amount of payments left on the outstanding loan. As per our financial records, $13 billion was taken in a single payment. Which to my understanding leaves $13 billion left over the course of six months if I am correct. We would like to understand the expected payments to be made over the remainder of our terms on the 12 month repayment scheme.

Our financial credit rating is equally important in these fiscally demanding times. Korea can be expected to continue to make its payments with prioritizing debt repayment in the national budget. This of course with the fact if major Asian economies defaulted on their loans, I am considerably worried of the impact on your shareholders and their confidence for continued lending. Ultimately, it is in our best interest to ensure a repayment arrangement that is continued and sustainable to maintain confidence in the credit-lending sector of global finances. This all considered, we hope that this dialogue can produce contingency plans in the unlikely event Korea is unable to repay portions of its debt to Sparrows. With half of the debt outstanding, once we understand the amount paid per month and the remaining time on our loan we can discuss in depth possible contingency plans.

For your convenience you can find our recorded transactions here. Submission. Confirmation. SWIFT Transfer.

Signed,
Cho Ji-Won
1st Vice Minister of Economy and Finance
Republic of Korea

---

Republic of Korea
Ministry of Economy and Finance
All information is protected from release by the Diplomatic Communications Security Act 1997
Authorized viewing is limited to those directly emailed, cc'd, and bcc'd​

 

[Hollie]

This Response is PRIVATE and ENCRYPTED

The European Financial Crisis disrupted billions of lives and jeopardised decades of development progress. As a business, this was particular hard to navigate and we was forced to take several measures to ensure our survival. Raising our interest rates was one such measure, intending to be a short term solution. Fortunately, Russia seems to have reclaimed focus on growth and sustainable development so we'll be reviewing our appreciation rates into the next fiscal year. For that reason, we might be able to offer the Republic of Korea a reduction on fees. This will be most beneficial in your current circumstances.

Our records show there's an outstanding balance of $13,000,000,000 with interest. You have (6) monthly repayments with the final payment due on 01st June, 1999. We can offer temporary debt solutions to avoid local economies defaulting. This includes the reduction and suspension of interest and repayments, until a client is capable of paying the balance in full. In exceptional circumstances, for Russia, we annulled a portion of the debt to help with their recovery. Korea has an exemplary background and has proven themselves to be a nation very capable of their finances. As we're probably to blame for your situation taking such a large payment without such consideration for other expenses, it's only right that we offer our assistance.


We look forward to discussing this with you in the very near future,
Sincerely,

​

Chief Executive Officer
Jay

 

[Jay]

To: Sparrows Investment < Hollie > CC: ShinShinyoung@moef.kr.gov, ParkJooyoung@mofa.kr.gov, MinSooju@moj.kr.gov, HanSooyoung@bok.kr,

From: ChoJiwon@moef.kr.gov

Subject: [Outstanding Loan]

Security: Private and encrypted Protected by the NIS and MoFA DPB

Dear Mrs. Durand,

I couldn't agree more with your assessment of the Russian Financial Crisis and its wider impact on the European Economic Crisis. Which is our primary goal to avoid in Asia. With a number of emerging economies it would be a major set back. I hope that it would not reach such a level, however, this is what contingency plans are for. The amount of effort to raise the limited capitol for Russia shows us that global economic cooperation is fairly limited to say the least.

We would like to discuss the appreciation rates on our loan which stands at 30%. We hope that with the expectations of a lowering appreciation rate that we could either amend the terms of our agreement and reduce the total amount due in line with that amendment. Other options could include your offers of a free reduction on the loan or a temporary freeze on repayment on outstanding loans of $13 billion while we address the debt. Either of which would help alleviate the temporary impacts of the rising debt issues. As a last resort we would have to discuss a restructuring of the payment arrangements for the loan to extend the payments over the course of an extended six months for a total of eighteen months.

Repayments are due monthly, whether Sparrows takes it out at once after a period of months or over mostly is ultimately your choice. I would not go as far as to say Sparrows is to blame. A number of factors contributed. Regardless, we are where we are today and where we are tomorrow depends on what we do. I am glad to have your cooperation and offers of assistance.

What would be the most optimal path for your company as to not spook your investors over any agreements signed between one of Asia's growing economies. I know that the optics of any agreement can shift opinion on the health of Asia's economies. Additionally remedies we'd have to take could include low-interest loans from foreign banks as a means to offset any major threat to our financial stability or requesting an emergency grant from the International Monetary Fund. Considering we've reached our $3 billion limit for 1998, we would have to wait either till 1999 for debt assistance or request an emergency grant ahead on behest of the Fiscal Year of 1999. We would for that reason, and as to not put the GA into a difficult position, would prefer to go through foreign banks and receive a low-interest loan to cover the costs of our debt arrangement and ensure we can continue with our repayment of the loan continuously. Regardless, I look forward to your response to see a beneficial arrangement for our two parties.

Best regards,
Cho Ji-Won
1st Vice Minister of Economy and Finance
Republic of Korea

---

Republic of Korea
Ministry of Economy and Finance
All information is protected from release by the Diplomatic Communications Security Act 1997
Authorized viewing is limited to those directly emailed, cc'd, and bcc'd​

 

[Hollie]

This Response is PRIVATE and ENCRYPTED

After reviewing the circumstances, we've agreed to freeze interest and charges to help Korea clear their debt. This means the remaining interest to the sum of $3,000,000,000 will be annulled. Once this has been recorded, your credit file will revert to it's former position, therefore allowing you to apply for credit in the future. This is what is known as an individual voluntary arrangement (IVA) and is a legally binding debt solution.

The changes made to your account have already been processed and your outstanding balance is $10,000,000,000; this reduces your monthly repayments by a third to $1,666,666,666.67. Hopefully this will allow you to make affordable payments, though you can request a temporary debt relief order (DRO) lasting up to twelve (12) months. During that time, Sparrow will not pursue you for payments unless your situation improves. While the DRO is in force, and for three months afterwards, the details of your account will appear on our insolvency register. This is for our records only.

We understand how difficult times are for the average consumer, so we're happy to negotiate new terms and conditions for a nation of your standing.


Sincerely,

​

Chief Executive Officer
Jay

 

[Jay]

To: Sparrows Investment < Hollie > CC: ShinShinyoung@moef.kr.gov, ParkJooyoung@mofa.kr.gov, MinSooju@moj.kr.gov, HanSooyoung@bok.kr,

From: ChoJiwon@moef.kr.gov

Subject: [Outstanding Loan]

Security: Private and encrypted Protected by the NIS and MoFA DPB

Dear Mr. Smith,

Thank you for the generous terms. We find the proposal to annul the remaining $3 billion in remaining interest on our loan and pursuing a debt management plan as optimal choices and course of action. With regards to the plans, we'd like to understand what impact the temporary debt relief order would have on our credit rating and future ability to take loans at small or large values. For the individual voluntary arrangement, would there be any fee associated, and could we review the terms with our judicial ministry prior to making any commitments?

Based on the previous questions, we would like to look at requesting a temporary debt relief order for a period of six months. We believe this is an optimal amount of time for us to restructure our finances operations. We would still if six months is a little longer than hoped, be willing to expedite the restructuring to four months. While I understand our loan was expected to be repaid on the first of June the upcoming year, a six month DRO would push that repayment to the first of December the upcoming year. That would mean a year from today.

I was also curious to know if the DRO will have any impact on us being able to lift the DRO ahead of the agreed date and either begin repaying the loan or perhaps cover the entire remaining loan. Which would be now $10 billion. I understand that contingent on improvements to our financial situation, Sparrows would not pursue further payments. Which I would assume would negate the question and mean that at a healthy financial level payments would have to resume.

Lastly, with a DRO, what impact would the insolvency register have on our financial capabilities to pursue contracts with other subsidiaries of the Sparrows conglomerate such as Sparrows Safeguards for example.

Best regards,
Cho Ji-Won
1st Vice Minister of Economy and Finance
Republic of Korea

---

Republic of Korea
Ministry of Economy and Finance
All information is protected from release by the Diplomatic Communications Security Act 1997
Authorized viewing is limited to those directly emailed, cc'd, and bcc'd​

 

[Hollie]

This Response is PRIVATE and ENCRYPTED

A debt relief order (DRO) is an alternative debt solution and is suitable for nations with a relatively low level of debt. We have already checked the details of your personal circumstances to ensure you meet the qualifying criteria. For that reason, this will not impact your credit record with Sparrow industries. We've already reviewed your borrowing history and are therefore happy to accept future credit applications. However, any new borrowing will be suspended for the length of your DRO. This means the Republic of Korea will not be allowed to apply for any new loans for a period of six (6) months under any business authority. For your peace of mind, we will not add a statement on your record that is frivolous, factually incorrect or defamatory.

As we're here to advise on debt solution, it would be imprudent of us to charge you additional fees. There are no hidden expenses associated with the debt relief order or individual voluntary arrangement. There are companies out there who will approach you with the promise of clearing your debt, but these do more harm than good. We, however, are a reputable organisation, who do not profit at someone else's expense.

If your circumstances change, you can put in a request to have your debt relief order removed. This may take twenty-four hours to review, but you can access your account and check the status of your application at any time. The insolvency register will not impact your ability to purchase from our other branch(s). It is a record of information designed only to counsel whether or not a client should be offered finance options in the future.


Sincerely,

​

Chief Executive Officer
Jay

 

[Jay]

To: Sparrows Investment < Hollie > CC: ShinShinyoung@moef.kr.gov, ParkJooyoung@mofa.kr.gov, MinSooju@moj.kr.gov, HanSooyoung@bok.kr,

From: ChoJiwon@moef.kr.gov

Subject: [Outstanding Loan]

Security: Private and encrypted Protected by the NIS and MoFA DPB

Dear Mr. Smith,

Thank you for the explanations on the DRO and IVA. With this all well understood, if the relevant documents can be transmitted to our ministry we can have our legal teams verify and then sign the documents at the Ministerial Level with Minister Shin.

With that, we are happy to continue our long standing cooperation with Sparrows Industry and their respective conglomerates from defense to financing. We look forward to continued cooperation and seeing mutually beneficial interactions for long-term growth.

Best regards,
Cho Ji-Won
1st Vice Minister of Economy and Finance
Republic of Korea

---

Republic of Korea
Ministry of Economy and Finance
All information is protected from release by the Diplomatic Communications Security Act 1997
Authorized viewing is limited to those directly emailed, cc'd, and bcc'd​

 

[Hollie]

The following Document, Debt Relief Order has been attached to this email and signed by Alexander.
This Response is PRIVATE and ENCRYPTED

Please review the attachment that has been submitted by Sparrow industries. Please endeavour to read and sign the documentation before 21st December. If you wish to make any changes, please let us know as soon as possible. If you wish to discuss this agreement, I can be reached by calling customer services on +44 163 296 0801.


Sincerely,

​

Chief Executive Officer
Jay

 

[Jay]

The Korean Vice Minister would schedule a meeting with the Minister, the Legal Division of the MOEF, and the Special Commission on Economic Recovery. As the meeting progressed it was determined the arrangements were fair. The Legal Division would review the terms for anything they would flag, after their review, Minister Shin would receive the document digitally. After his own review, and discussion with the Vice Minister, the two agreed this was the best path to put Korea quickly back on the path towards recovery. The Minister would sign the document and Vice Minister Cho would have the document copied for archive with the Korean Government before uploading the signed document to Sparrows.

To: Sparrows Investment < Hollie > CC: ShinShinyoung@moef.kr.gov, ParkJooyoung@mofa.kr.gov, MinSooju@moj.kr.gov, HanSooyoung@bok.kr,

From: ChoJiwon@moef.kr.gov

Subject: [Outstanding Loan]

Security: Private and encrypted Protected by the NIS and MoFA DPB

Dear Mr. Smith,

Thank you to your conglomerates continued positive relations with Korea. Please note that we have reviewed the document. H.E. Minister Shin Shinyoung has signed the document. We find its arrangements agreeable and have no amendments to make to the agreement.

Best regards,
Cho Ji-Won
1st Vice Minister of Economy and Finance
Republic of Korea

---

Republic of Korea
Ministry of Economy and Finance
All information is protected from release by the Diplomatic Communications Security Act 1997
Authorized viewing is limited to those directly emailed, cc'd, and bcc'd​

 

[Hollie]

This Response is PRIVATE and ENCRYPTED

This is to inform you that the agreement in compromise you signed and dated on 09th December is now in effect. Under the conditions of the agreement, we have amended your account status. We are waiting for you to submit a financial statement with the full details of your situation, including any other financial obligations you may have. We will keep this in our records for the term of this agreement and will add any new information as and when circumstances change.

Your patience and co-operation in this matter has been greatly appreciated.


Sincerely,

​

Chief Executive Officer
Jay

 

[Jay]

To: Sparrows Investment < Hollie > CC: ShinShinyoung@moef.kr.gov, ParkJooyoung@mofa.kr.gov, MinSooju@moj.kr.gov, HanSooyoung@bok.kr,

From: ChoJiwon@moef.kr.gov

Subject: RE [DRO] Outstanding Loan

Security: Private and encrypted Protected by the NIS and MoFA DPB

Dear Mr. Smith,

As per the confidentiality of our discussions, the following reports are approved for viewing by the executive committees of Sparrows Industry. The following report is a partial assessment for from our recovery committee for quarter one of fiscal year 1999. For that reason, much of the project planning aimed for quarter two has not been accounted for.

Due to the financial circumstances of the country, there is a suspension on project planning until debt repayment. For overview on fiscal planning for quarter one, please see Section A. For specifics to financial obligations to foreign lenders, please view Section B. For official record, please note, we request items under Section A be excluded from any non-confidential reporting systems. The information is at this time confidential as according to our document handling protocols.

Should your agencies require further information, please inform us as needed with specifics. We look forward to completing the required documentation and information.

Section A

	Planned	Actual	Diff.
Totals	$5,000,000,000	$25,904,100,972	-$20,904,100,972
Ministry of National Defense Procurement	$0	$444,100,972	-$444,100,972
Infrastructure	$0	$5,060,000,000	-$5,060,000,000
Unification Infrastructure	$0	$0	$0
Foreign Cooperative Assistance Aid	$5,000,000,000	$0	+$5,000,000,000
Non-military Procurement	$0	$0	$0
Government Expenses	$0	$0	$0
Outstanding Loans	$0	$17,000,000,000	-$17,000,000,000
Korean Development Bank	$0	$0	$0
Research and Development	$0	$200,000,000	-$200,000,000
Space Program	$0	$3,200,000,000	-$3,200,000,000
Other	$0	$0	$0

Section B

Amount	Description	Category
$10,000,000,000.00	Sparrows DRO Arrangement	Outstanding Loans
$7,000,000,000.00	ADCA Project Repayment	Outstanding Loans

Best regards,
Cho Ji-Won
1st Vice Minister of Economy and Finance
Republic of Korea

---

Republic of Korea
Ministry of Economy and Finance
All information is protected from release by the Diplomatic Communications Security Act 1997
Authorized viewing is limited to those directly emailed, cc'd, and bcc'd​