SEOUL/TOKYO — A South Korean local court began a process that could lead to seizing assets of a Japanese company involved in wartime labor, a move which provoked criticism from Tokyo.
The move by the Pohang branch of Daegu District Court in southeastern Korea on Wednesday targets Nippon Steel, previously known as Nippon Steel & Sumitomo Metal Corp.
Public notification will be made on Aug. 4, suggesting that the assets could be liquidated as soon as this summer.
The court ruling is considered a formal notification to a defendant. The assets possessed by the plaintiff involve 194,000 shares that Nippon Steel owns in POSCO-Nippon Steel RHF Joint Venture, a tie-up with South Korean steelmaker Posco.
South Korea’s Supreme Court in 2018 ordered Nippon Steel, as well as Mitsubishi Heavy Industries and machinery maker Nachi-Fujikoshi, to compensate South Koreans forced to work during World War II.
The plaintiff is now one step closer toward selling the assets if the court rules in its favor after Aug. 4. Tokyo is requesting that Seoul avoid liquidating the assets, but the two have been unable to find common ground, with the national government deferring judgement to local courts.
Bills proposed by National Assembly Speaker Moon Hee-sang to resolve the wartime labor dispute by establishing a joint fund for compensation were ditched by South Korean lawmakers in late May.
Japanese Foreign Minister Toshimitsu Motegi voiced concern on Wednesday over the wartime labor issue in a phone call with South Korean counterpart Kang Kyung-wha, saying the liquidation of Japanese assets “needs to be avoided as it would result in a serious situation.”
The two ministers agreed to continue negotiating for an equitable resolution.
During the meeting, Motegi also objected to Seoul’s decision to reopen a World Trade Organization complaint about Japan’s tightening of export controls, arguing this was “extremely regrettable, as [the complaint] is not helpful in resolving the issue.”