[Editorial] Minister Song's moral stance

Regretfully, Education Minister Song Ja`s moral stance is now being questioned by the mass media due to the windfall profits he made from selling unclaimed stocks he purchased when he was an outside director of Samsung Electronics Co. Ltd. Minister Song and Samsung Electronics argue that his purchase of the forfeited stocks has no legal flaws since all the necessary legal procedures were taken before the purchase, such as approval by the Samsung board of directors. We also realize that Song may feel chagrined about the media`s criticism of the profit he made, as the media does not take into consideration the fact that no one can predict future values of stocks and shares.

But, the crux of the matter for the controversy is that Minister Song is not an ordinary Joe or Jack. Although his purchase of unclaimed shares was duly approved by the company directors and executives, Song must think about whether his purchase was a wise and desirable decision in view of his role as an outside director. Song`s case may not, indeed, have been anything unusual or exceptional, but reflects the company`s usual practice of disposing of unclaimed stocks. What matters here is the fact that he received such a favor from the company though he was supposed to supervise and monitor the firm`s management in his role as an outside director. Moreover, everyone is aware that Song knows better than any person what the role of an outside director should be since he is such a knowledgeable expert in that field.

Most disturbing here is the fact that the money he bought the stocks with was the company`s advanced payments to him. This is same as if he bought the stocks using funds he borrowed from Samsung without any interest payments on the loan. We have serious reservations whether that is something any person with moral rigors and strictures would do, no matter what the company`s practice has been.

Furthermore, the interest rates at the time he received his advance payments from Samsung Electronics were higher than they are now. Thus, the loan with no interest payments is itself the company`s favor for Song. For that reason, Minister Song`s announcement that he will return to society the profits he made from the sale of the stocks is a just and proper, albeit somewhat belated, gesture on his part.

As we all know, there will be no use for the outside director system if a non-company director is to receive favors from the company and become the company`s crony. This case should also serve as a reminder of our need to remedy other similar cases of the symbiotic relationship between an outside director and a company management in all of our business firms.

The government for its part must come forth with the necessary institutional devices to establish a rigorously transparent relationship between a company and an outside director.

It is regretful that Chong Wa Dae and the ruling party tend to view this issue rather lightly on the grounds that the matter occurred before Song`s appointment as a cabinet minister. If what has happened prior to a cabinet appointment is regarded as immaterial by the ruling powers, there will be no use for any prior process of rigorous scrutiny to test appointees` qualifications and moral adequacies.

The government must bear in mind the fact that Minister Song is responsible for the nation`s education, which requires higher and more rigorous moral requirements than any other cases of cabinet appointment.