The economic think tank for the lobbying group of South Korea’s big businesses on Tuesday called on the government to streamline corporate restructuring rules to reflect global trends.

According to a report by the Korea Economic Research Institute (KERI) under the Federation of Korean Industries, the government needs to provide more options for companies who have to implement corporate restructuring efforts, especially since more and more companies are facing difficult times.

It said policymakers and parliament needs to revise rules governing corporate workout programs, creation of private equity funds and tax breaks.

The KERI said South Korea should adopt out-of-court workout schemes that are generating interest abroad and can augment the current court receivership program.

“Out-of-court workouts can be implemented when management realizes they are in trouble and want to restrict losses,” the research institute said.

It also said that there is a need to harmonize the country’s corporate restructuring promotion act with its corporate bankruptcy law.

In the case of the restructuring promotion act, management can hold onto control of a company in trouble, in most circumstances, but such clauses are not in the bankruptcy law. (Yonhap)