‘Parachutists Land’ at State Owned Corporations Again

Despite the criticism from the public, the government appointed the politicians to the head of the state owned corporations.

On May 9, the government appointed Kwon Hae-Ok, the deputy president of the United Liberal Democrats (ULD) to the head of the Korea National Housing Corporation. The government also appointed Bang Yong-Seok, a former ULD Assemblyman to the chief of the Korea Gas Safety Corporation.

Prior to these appointments, Lee Suck-Hyun, a former Assemblyman, was appointed to the Chief Director of Environmental Management Corporation on May 4. Last month, Huh No-Jung of ULD was appointed to the president of KOSCOM.

Cho Hong-Kyu, president of Korea National Tourism Organization, Kim Yong-Che, president of Korea Land Corporation, Kim Myung-kyu, president of Korea Gas Corporation, Park Moon-Su, president of Korea Resources Corporation, Yoo In-Hak, president of Korea Minting & Security Printing Corporation, and Kim Dong-Tae, president of Agricultural & Fishery Marketing Corporation were appointed from either the Millennium Democratic Party (MDP) or ULD. The Grand National Party claimed that 70 percent (49 people out of 67 total) of presidents and chief directors of the 56 state owned corporations came from either MDP or ULD last Feburary.

Newly appointed Kwon and Bang are the typical case of ‘parachute appointment’ (top-down hierarchical management), since they do not have any experience in those fields. First qualification for the presidency candidates required by the president nomination committee of the Korea National Housing Corporation was ‘expertise and experience in the field of housing’.

Ministry of Construction and Transportation under Minister Oh Jang-Seop, the Korean Land Corporation and the Korea National Housing Corporation are all controlled by ULD members.

The economic experts and the officials from civil organization pointed out that ‘The government will face criticism that its firing of six presidents of the state owned corporations, such as Oh Shi-Duck of KNHC, and one auditor under the name of reprimand, was a strategic move to appoint the ruling party politicians to those positions’.

Jun Yoon-Chul, Minister of Budget and Planning, once said that ‘As much as possible, people, who lack expertise and experience, won’t be appointed to the presidents of the state owned corporations’.

Since the auditor positions in the stock companies, along with the banks, are appointed to the people from Financial Supervisory Service (FSS), the potential adhesion between stock companies and Supervisory agencies is pointed out. According to the Korea Securities Dealers Association, 21 from FSS and 8 from Ministry of Finance and Economy are working as auditors and chief directors.

Kwon Soon-Hwal shkwon@donga.com