“Bribe Party” by Public Officials and Professors

The Board of Audit and Inspection (BAI) exposed on July 29 that 33 bureaucrats, including incumbent high officials in the Ministry of Information & Communication, researchers in its umbrella research institutes, and professors at national universities, received unfair profit amounting to several hundreds of millions of won by buying work-related IT companies’ stocks for free or at extremely discounted prices. BAI accused 13 bureaucrats with serious illegality.

This was disclosed as a result of a business administration status audit for the information promotion fund, which had started from December last year.

Resulting from this unfair profit-taking problem, the Ministry of Information & Communication decided to change the fund management method dramatically. The new policy includes for the ministry to make it mandatory that the 48 department chiefs of umbrella institutes related to the fund register their properties and appoint outside experts for 70 percent of the fund management council members.

I Will Give You Information, Then Give Me Stocks—

Seven officials ranging from the grade 6 clerical staff to grade 3 high officials in the Ministry of Information & Communication were given venture company shares as a kickback.

Mr. L (grade 3 official) of the Ministry of Information & Communication helped Mr. J, CEO of Company U, to acquire a government subsidiary fund of 1.44 billion won by informing the CEO of the plan for a “leading technology development project.” Later Mr. L bought 500 shares of the company at 25 million won (50,000 won per stock) and made 112,960,000 won after the company was listed on KOSDAQ (Korea Securities Dealers Automated Quotation).

Another Mr. L (grade 3 official, Korea Post Division in the same ministry) made 49 million won in marginal profit by buying, at half the face value in December 1999, 20,000 shares of the company which was supported by an information promotion fund provided by Information Technology Assessment (IITA), an umbrella institute of the Ministry of Information & Communication.

4 officials of Grade 5 and 6 ranks in the same ministry made several tens of millions won in profit by receiving free shares or by buying at an extremely discounted price of the work-related companies.

Professors of National Universities Are Not an Exception—

Division President Mr. P of the Electronics and Telecommunications Research Institute handed down two types of technologies to Company J in September 1999 and made 403,070,000 won by buying 35,970 shares of the company for 80,350,000 won as a reward.

Also, the chief of financing team of the Electronics and Telecommunications Research Institute, Mr. Y, received shares amounting to 12,720,000 won for free as a reward for the information promotion fund loan amounting to 1.5 billion won to a specific company.

Associate Professor H of the Engineering school at a national university was accused of taking shares amounting to 186,750,000 won for free when he worked for Company N as an assessment committee member of a division of the Electronics and Telecommunications Research Institute.

Young-Hae Choi Tae-Han Kim yhchoi65@donga.com freewill@donga.com