Taep’ung Investment Group Formally Dissolved

1 Feb
A 2010 meeting of borad members of the DPRK State Development Bank, linked to the Taep'ung Internati

A 2010 meeting of borad members of the DPRK State Development Bank, linked to the Taep’ung International Investment Group. In this image are Jon Il Chun (R) and Ro Tu Chol (2nd R) (Photo: KCTV screengrab)

Yonhap News Agency reported and confirmed on 1 February (Friday) that the Korea Taep’ung International Investment Group has dissolved.  Taep’ung began as an energy provider selling oil and gas (via Sinu’iju) to the Korean People’s Army [KPA] and Korean Workers’ Party [KWP] Central Committee.  Its leading executive was Pak Chol Su, a Korean resident in China.  Through his sales of energy supplies to the party and army, Pak became part of the Pyongyang social scene and eventually developed close ties with senior KPA and KWP officials.  In 2006 Taep’ung was formally organized as one of the country’s direct foreign investment entities.  Until 2010 there was little reported about Taep’ung’s activities in the country.

In early 2010, Taep’ung was designated as a key investment entity of the DPRK through authorization by Kim Jong Il and the National Defense Commission.  On 20 January 2010, the Korea Taep’ung International Investment Group was formally incorporated and held a meeting of its 7 member board of directors in Pyongyang.  KWP Secretary and United Front Department Director Kim Yang Gon was appointed director-general of the board in his capacity as Chairman of the Asia-Pacific Peace Committee with Pak Chol Su appointed a deputy director-general of the board.  According to DPRK state media Taepu’ng was organized under the auspices of the DPRK National Defense Commission, the DPRK Cabinet and Ministry of Finance and the Korea Asia-Pacific Peace Committee.  Incorporated and organized alongside Taepu’ng’s expansion was the State Development Bank, which would be led by Jon Il Chun, a proxy for the National Defense Commission and a close aide to the late leader Kim Jong Il.  Jon, also (and currently) a deputy director of the KWP Finance and Accounting Department, was elevated to head the State Development Bank at the same time he was appointed to manage the powerful DPRK conglomerate Taeso’ng Group and as the key head of Office #39, lucrative entities earning foreign currency for the DPRK.  Taep’ung had attained such a flavor-of-the-week status  that one of its key KPA contacts appeared on an April 2010 military promotions list.

Despite several attempts, including the internal transfer of several state-owned enterprises, and a high profile trip by Jon Il Chun at the head of a large delegation of executives under the auspices of Taepu’ng, the company attained little to no foreign direct investment.  There were also unconfirmed  (and likely erroneous) rumors Taepu’ng became the business rival to another DPRK entity, reportedly  established as a competing venture by Gen. O Kuk Ryol.  According to Yonhap, Taep’ung “oversaw the now-suspended joint tourist program in Mount Kumgang on the eastern coast of North Korea” and  was dissolved along with “another extra-governmental organization in charge of trade promotion and foreign investment with its work believed to have been reassigned to the government’s Commission for Joint Venture and Investment.”  It appears that a lot of direct foreign investment has now been consolidated under the Joint Venture and Investment Commission [JVIC], which is under the direction of Ri Ryong Nam and Ri Chol, along with the heavy hand of the Ryo’ngdoja, Jang Song Taek.  There also became problems with Taepu’ng’s Chinese backer Pak Chol Su and it did not help Taepu’ng’s external activities to have the imprimatur of the National Defense Commission, which is subjected to numerous United Nations and unilateral sanctions.

Similarly Taepu’ng’s existence may have presented a fundamental obstacle, or proven the wrong entity, for progress in the development of Special Economic Trade Zones in Rajin-So’nbong (Raso’n) and Hwanggu’mp’yo’ng/Wihwa Islands.  Of course, one corporation is but a small obstruction to howeverUnited Nations Security Council reacts to the potential nuclear test.   And yet, development in Raso’n (despite what one might read in the general lit.) seems to making some progress, likely in anticipation of the thaw of Unggi Bay.  It remains to be seen if the upcoming nuclear detonation and its UNSC blowback will affect the activities and formation of various PRC-DPRK development working groups (anchored in China) in late December 2012, and the signing of additional and explicit agreements on infrastructure and design using both DPRK and Chinese entities (no one will use the term iron-clad, just yet).

On 23 January, Chinese media reported that the DPRK Government approved the opening of a Chinese commercial bank primarily to settle transactions in Raso’n.  The bank was founded and a ribbon cutting ceremony held on 18 January.  According to Hunchun Rexian “Chinese Commercial Bank was put together and founded by China Gold Trade Exchange (Dalian) Company Ltd. The bank’s primary business is renminbi settlement, handling letter of credit, bill of exchange, letter of guarantee, and guaranty for cross-border renminbi transactions, and offering savings, loans, banking, and other financial services. Chinese Commercial Bank was founded to conform with the needs of massive development of Sino- DPRK economic and trade at present as well as the needs of the “Outline of General Program for Joint Development and Joint Management of Naso’n Economic and Trade Zone As Well As Hwanggu’mp’yo’ng Economic Zone,” which was signed by China and the DPRK; it will act as a bridge and a bond in promoting and safeguarding Sino-DPRK economic and trade development.”   Hunchun (PRC) Vice Mayor Ren Puyu said that, “Agreement on Joint Development and Joint Management of Raso’n Economic and Trade Zone” between the Chinese and the DPRK governments, and is the bridge and bond for serving Sino-DPRK financial cooperation and trade interactions; it will definitely play a positive role in promoting Sino-DPRK economic and trade interactions as well as economic prosperity in the future.”

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One Response to “Taep’ung Investment Group Formally Dissolved”

Trackbacks/Pingbacks

  1. North Korean Economy Watch » Blog Archive » Taepung International Investment Group allegedly dissolved - 02/07/2013

    [...] 2. NK Leadership Watch has an excellend review of the organization here. [...]

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