A pained South Korean government plunged into the controversy over France’s suspension of the sale of Thomson SA, saying it was seeking an understandable explanation from Paris: amid concern in South Korea that racism had blocked the sale, the Seoul foreign ministry said it had issued a cable through its Paris embassy seeking clarification. Daewoo Electronics Co chairman Bae Soon-hoon, bitterly disappointed that the company’s opportunity of becoming a major player on the world consumer electronics stage appeared to have been dashed, suggested that France was not telling the full story. Even the French media branded the suspension a disaster and a fiasco handled with execrable public presentation and said France’s image would be seriously damaged by the debacle. This reads like a bad politico-financial thriller, Les Echos said. French Finance Minister Jean Arthuis said yesterday he hoped the privatization of Thomson SA would take place before the spring and did not rule out breaking up the company in the sale. It must be done as quickly as possible, he said in a radio interview. On the original plan to sell Thomson Multimedia to Daewoo, Arthuis said The government rallied to this idea because Daewoo was in a position to create jobs and dig Thomson out of its ditch. Daewoo has repeatedly promised to create as many as 5,000 jobs and invest more than $1bn in France after taking over Thomson Multimedia. Korean companies are big investors in both the UK and the US, and both countries will be hoping to win a bigger share of Seoul’s $24bn program to buy or build fighter jets and other other potentially lucrative defence orders, at the expense of France. South Korea is also a rare foreign showcase for French high-speed-train technology and nuclear power stations. While most analysts in South Korea saw a Daewoo takeover of Thomson Multimedia as a win-win deal for Daewoo and for France, a few contrarians argued that the Thomson deal never made sense for Daewoo. Daewoo is already terribly over-leveraged and losing ground domestically to LG and Samsung, said Matt Cleary, electronics analyst with HG AsiaLtd. I saw this move as one of desperation all along. It just seemed as if they had to do something dramatic while they still had the energy.
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