Gov’t puts KRX under state control
The government yesterday designated the Korea Exchange as a public organization, putting the bourse operator under strict state audit and budget control.
The government said the measure is inevitable given the public role of the KRX, such as authorizing the listing of a company and supervising unfair market activities.
But the move was met with suspicion that it is revenge for the KRX’s refusal to hire a government-recommended individual as a board member.
In March 2008, a KRX committee chose Lee Jung-hwan, the exchange’s current head, as its chairman over a candidate rumored to be backed by the government.
In May 2008, the government initiated a move that people say was a penalty for disobedience, by putting the KRX under a prosecution investigation for its management practices.
In September, the Bureau of Audit and Inspection, the state audit agency, began an audit on the KRX. The audit agency said the KRX deals with public roles but there is lack of means to supervise and check quality.
The Ministry of Strategy and Finance offered an official denial yesterday. Market participants are strongly acting against the move, saying the government has no stake to do so.
The KRX is a private company owned by brokerages, futures companies and other securities-related organizations.
There is criticism that the government infringed on the rights of stockholders of the Korea Exchange.
Another concern is whether a state-controlled bourse operator can compete with counterparts from all over the world in this globalized world.
Government intervention in personnel management is also expected to increase.
“The government can supervise the KRX through the Financial Supervisory Service, so the move is deemed as an intention to control the KRX personnel management policies,” said Kwon Young-joon, a Kyung Hee University professor.
By Lee Hee-sung JoongAng Ilbo / Moon Gwang-lip Staff Reporter [joe@joongang.co.kr]
with the Korea JoongAng Daily
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