[EDITORIALS]Lee Keun-young's dutyEnough evidence has been revealed to support allegations that the Korea Development Bank's overdraft loan of 400 billion won ($320 million) to Hyundai Merchant Marine Co. violated common sense and good banking practices. The bank extended the loan based on an arbitrary decision by its chief credit official without even consulting the shipping company's main creditor, Korea Exchange Bank, just three days after Hyundai Merchant Marine applied for it. Documents concerning the loan were also riddled with problems, including the missing signature of the shipping firm's chief executive.
Uhm Rak-yong, a former governor of the state-run bank, said he was told that the Blue House chief of staff at the time pressed the bank to grant the loan. But Financial Supervisory Commission Chairman Lee Keun-young, who was the bank's chief when the loan was granted, says the suspicions are groundless.
Regulators can easily find out where the money went if they look at Hyundai Merchant Marine's accounts, but Mr. Lee says that is illegal. Rebutting Mr. Uhm's testimony that the money might have been sent to North Korea, he said, "Mr. Uhm seems to mistake rumors he heard for facts. It is not true that the government provided $400 million to North Korea."
But what does he know and won't say? He ran the bank when the loan was made and he now regulates the banking industry. Many experts dispute that tracing the loan would be illegal, so he made another silly argument: "Hyundai Merchant Marine has many overseas transactions. How can we investigate what happened overseas?"
A new suspicion has been raised about the government's special treatment of the Hyundai company, because the state-run bank's lending to the firm more than doubled in a single year. Political wrangling about the loan has been going on for nearly one month, and operations at the bank have been thrown into utter chaos. Hyundai Merchant Marine is also suffering; it is facing a severe funds shortage, as other banks wonder if these revelations will cause new loans to go sour. We urge Mr. Lee to act like a true public official by revealing the truth and taking his share of responsibility.