Improper Goverment Manipulation of BanksThe case of the appointment of Kookmin Bank president, Kim Sang-hoon, by the goverment revealed its shameful nature.
The governments compulsorily appointment of Kim Sang-hoon, deputy governor of the Financial Supervisory Service, as Kookmin Bank president resulted in labour unions, who opposed his nomination, blocking the entrance to the shareholder's meeting. Following this, directors from outside of the banks managment abruptly changed the location of the meeting and appointed Kim as the president.
Next, the labour union forcefully stopped the new president and executives from reporting to work. The current situatioin is reminiscent of the crippled operation of the National Assembly. We belive that the government was originally responsible for all this useless action and wrongdoings.
However, this improper operation of the bank was expected from the beginning. Therefore, the basic responsibility certainly lies on the government.
First, the election procedure was not trasnperent. Recently, Kookmin Bank presidents have been resigning continuously. The surface reasons for resignation have been "personal" and "health" matters. Nevertheless, the actual reasons were already generally known to the people inside the bank. When Song Dal-ho, former Kookmin Bank President, resigned due to his 'health' during his term, the rumor about the next potential president was widely spread. Moreover, the rumor was confirmed as truth.
The government's fundamentals and standards are questionable. Kookmin Bank is considered one of the banks with superior performance. Its majority shareholders include various foreign investors such as Goldman Sachs. There can be no justification for a government forcefully appointing its president. If these kinds of government fundamentals are applied to other banks, we would be left with little doubt about the possiblity that the presidents of all banks will be appointed by the government.
It may be reasonable for the government to regulate and manage banks to prevent insolvent performance; especially since the financial crisis had been caused mainly by unreliable bank operations. However, consistent standards with transperant and fair procedures must be applied to everything. It is even more important to avoid selfish motivation. The government's action to take over an individual bank's management can only be considered as an arrogant and deceptive decision.
by Eum Sung-jik