Original capital formation of NEADB seems to follow ADB
formula, which is scheduled to acquire 50% of cash payment for 5
years and to obtain 50% by safety net basis. Regional stockholders
would be People’s Republic of China(hereinafter called PRC),
Japan, Korea, Mongol, Russia, and Taiwan. Outside regional
stockholders might be presumably U.S.A., EU, Australia, New
Zealand, etc. The original design is based on the multinational
public(or diplomatic) development bank character. Therefore, the key
point of the fund raising method is that Japan, PRC, and Republic
of Korea governments would make the seed capital formation of $1
billion for 5 years. Rest of the capital is designed to be accrued
through external payment guarantee.
However, the fundamental approach of Bush Administration seems
to be Neo-Monroeism and vertical international integration of North,
Middle and South American contintents. This was confirmed by
recent 2nd presidential press conference by stating American
interest-firstism. Under these circumstances, U.S. major role and
function of establishing NEADB is somewhat doubtful. There lies
some ‘raison d’etre’ of seeking an alternative, auxiliary approach by
private financing channel, since smooth diplomatic solution of
government to government fund raising among regional and outside
regional nations seems to be difficult for the time being. For
example, Japan Fund was established in 1964, and 20 years later,
Korea Fund was successfully listed in New York Stock Exchange
as a Maryland State Juridical Person.
As a rule, one fourth of authorized capital is paid-in capital,
and the stock holding company can be set up. If the joint lead
managers were selected in regional base, Japan’s, PRC’s (Hong
Kong) and Korea’s leading brokerage firms could be able to
combine with U.S. and EU major investment bankers by setting up
a syndication group. In case of global base fund-raising, New York,
London, Zurich, Tokyo, Hong Kong, Sydney’s leading underwriters
should be participated. The key questions are who should be the
lead manager of that syndication, where the location of the
headquarter should be, and finally who will be the Governor (or
CEO) and directors. If we intend to “go public”, the “prospectus”
should be made, and the road shows should be held among the
global financial markets. This is the way of starting small and
growing larger by purely commercial basis, as most of financial
institutions of Northeast Asia regions are still premature.
