[EDITORIALS]Prosecutors must be firmIllegal lobbying by the Hyundai Motor Group to have creditors write off the bad debts of Wia Corp. and Ajou Metals is far more serious than past corporate scandals.
Prosecutors found that Hyundai lobbied the state-run Korea Development Bank, the state-run Korea Asset Management Corp. (Kamco) and corporate restructuring companies. It then tried to cover its tracks with complicated procedures such as camouflaged bidding. But the essence of this scandal is that Hyundai persuaded the creditors of Wia and Ajou into writing off 55 billion won of bad debts in the affiliates, which had been spunoff, and then included the units back into Hyundai Motor Group. The public funds that saved these affiliates are gone.
The prosecutors arrested two vice presidents of Hyundai Motor and a former deputy governor of the Korea Development Bank. This case proves the rumor correct that public funds are “blind.” Although the Korea Development Bank is arguing that this was a “normal transaction,” this is hard to believe. The prosecutors’ argument seems much more credible - such a trade would have been impossible without the collusion or connivance of the Korea Development Bank, Kamco and related government authorities.
This write-off of taxpayer money goes beyond a simple moral hazard. In this case, the public fund system has been abused to an extreme ― it is a serious crime against the public. Given the terrible nature of this crime, how could the Hyundai Motor Group, the nation’s leading jaebol, have done such a thing? Some people say that the prosecutors should end their investigation into the Hyundai Motor Group as soon as possible considering the current economic difficulties. But we should not heed this view because this case involves public funds. It is unforgivable to abuse the public funds system which was created during the 1997-98 financial crisis that pushed the country to the edge of a precipice.
The nation has recovered 76.1 trillion won of public funds so far ― only 45.3 percent of the 168.2 trillion won that it pumped into the troubled companies. Considering the burdens on the public from raising these funds and the burdens the public must shoulder in the future, this crime can never be overlooked.
The prosecutors should punish all the people involved to soothe the public’s anger. The prosecutors should make it clear that those who waste taxpayers’ precious money will be punished.