Controversy Over KDB Governor’s Resignation

Governor of the Korea Development Bank Jung Keun-yong whose term of office ends next year said April 14 that he had summated his letter of the resignation to the government on April 12. Yoo Gee-chang, vice chairman of the Financial Supervisory Commission, was named as the successor of the outgoing KDB`s governor.

That day, KDB governor Jung said, “Deputy Prime Minister for Finance Kim jyin-pyo asked me to resign last week. Although I had an intention of quitting my job, I am really sorry that I have to leave the bank at a time when it is now facing a lot of difficulties.”

Presidents appoint the KDB governor at the recommendation of the deputy Prime Minister for finance.

It is expected that follow-up appointments of new heads of financial institutions will follow KDB governor’s resignation because it came before appointments of governors of state-run banks and heads of state-controlled corporations.

In addition, the Finance and Economy ministry April 12 decided to dismiss deputy governor of the KDB Park Sang-bae, who was involved in the process of the KDB extending 400 billion won in loans to Hyundai Merchant Marine, on charges of violating the KDB law.

Meanwhile, the KDB`s labor union issued a statement accusing the government of interfering in personnel management of state-run banks. The statement warns that if the appointments of governors of state-run banks are carried out according to interests of the political community, it will hamper the soundness and continuity of government-initiated programs, which lead to undermining the development of the national economy.

Dong-Won Kim Kwang-Hyun Kim daviskim@donga.com kkh@donga.com