An unnecessary bankThe Korea Development Bank plans to donate 1 percent of its net profit to establish a public utility foundation. Senior executives returned 600 million won ($630,000) out of their payments as a donation for the foundation. The company plans to support low-income groups and to build a library with this money. It sounds like they are doing some good. But if one looks at it closely, one feels suspicious that they are pulling a trick to reduce public criticism against them.
The state-owned bank has been criticized many times for its reckless management and corruption. It gave bonuses to its employees violating regulations and then that was discovered by the Board of Audit and Inspection. The head of one of its branches committed a financial fraud worth of hundreds of millions of won. Last year, the annual salary for the governor of the bank was 742,150,000 won and the average annual salary for staff was 87,580,000, the highest in public corporations. When a employee studies abroad, he receives $60,000 yearly for living expenses. on top of his or her regular salary.
They spend as much money as they want and now they want to make a donation to society with what’s leftover. They should try to establish more discipline first.
The company plans to increase its size, instead of reducing it. The bank was established in order to provide huge amounts of money to carry out government policies in the era of development. But as the private sector of the economy developed, its workload diminished. It must be privatized or shut down.
But instead, it has been increasing its size by going into new businesses that are irrelevant to its initial purpose. For instance, it plunged into the financial operations of private companies and opened a securities company as a subsidiary. Now, it plans to establish a public foundation. Probably the bank feels that it will not be pressured to shut down if it does good deeds. Pushed by public opinion, the government released a plan to reform public banks but that has vanished. Government officials can give jobs as governors or auditors of public banks to people in their network. Then they can make big money. Thus, the government must be reluctant to see these positions disappear. They probably want this recent criticism to subside, instead of reducing the size of the bank or privatizing it. If the government and the Korea Development Bank want to make a contribution to society, first they need to think of ways to spend less taxpayers’ money.