hypa ANALYSIS
hypa is famous for it's global analysis which looks at issues relating to current events and helps us fill our web pages with stuff. hypa has access to sources of information from all over the world, and from many diverse contacts. Each week we look at an issue connected to our chosen topic of the week.
KorCo Investment in the UK
Several months after it announced it's $1.9bn (£1.1bn) investment in a silicon chip plant in northern England, the South Korean company KorCo has run into planning difficulties.
Work on the building of the factory had been sanctioned by the Planning Committee of the local County Council to continue until 11pm on weekday evenings. However, to complete construction on time, work has been continuing past this deadline for several weeks, in breach of planning regulations and to the annoyance of local residents.
The Planning Committee had decided to take no action against these breaches at a meeting from which the influential Chairman, Councillor William Alcock, was absent.
On Monday 27th October Councillor Alcock was quoted in a local evening newspaper as saying, "I believe the Committee should revisit this decision with a view to enforcing penalties on KorCo."
At 11:00pm on Monday evening the story was included in a summary of business articles from the UK regional press by a London news agency.
The same story was picked up and repeated by the Asia region news agency Xiang Corporation News (based in Seoul, South Korea) where it appeared at 07:30 hours. Their version of the story now contained a quote attributed to a senior KorCo manager involved in the project: "We did not give them this investment so they could tell us how to run it all. It is not too late for us to look at other options for our site."
This story was on dealer's screens in the Seoul stock market as they arrived at work. KorCo shares were immediately marked downwards on fears that such a huge investment was not going to run smoothly. The large capitalisation of KorCo on the stock exchange lead to an early 300 point fall as other shares were pulled down with KorCo. The market continued on a slowly downwards trend for the next hour, when the Hong Kong markets opened. Hong Kong is one hour behind Seoul.
Whilst the early losses on the Seoul markets are not likely to have directly caused the collapse in Hong Kong that followed on Tuesday morning, it is likely that they contributed to negative market sentiment and may have prompted the large falls earlier than they would otherwise have occurred.
This strange case of an obscure local government planning committee being involved (indirectly) in global financial collapse costing billions of dollars clearly illustrates how wacky this whole thing is.