Curbing crooked practices

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Curbing crooked practices

Public corporations are run with taxpayer money. That’s why a high work ethic is required of their employees. In reality, however, many executives and other employees of our state-run companies seem to believe their workplaces are without owners, as evidenced by their frequent deviation from the code of ethics.

A multitude of them were recently discovered to have engaged in online stock trading during working hours. The government’s ethics code for all employees of state-owned corporations - both high-ranking executives and the rank and file - prohibits them from trading shares for private purposes during working hours.

The Board of Audit and Inspection recently overhauled the code of ethics at five public financial entities, including the Korea Export and Import Bank (Koreaexim), Korea Development Bank (KDB), Korea Asset Management Corporation (Kamco), Korea Teachers Pension (KTP) and the Public Officials Benefit Association (POBA).

According to the results of BAI’s inspection, which started in September 2010 and ended in March, 10 to 29 percent of managers and ordinary workers - a total of 699 employees - had done stock trading on the Internet while on duty. Among them, 34 turned out to be directors or heads of branch offices who are responsible for employee supervision. In the case of POBA, even the audit team chief was found to have bought and sold stocks during the workday.

Meanwhile, an employee working for POBA’s stock management unit made improper gains of 118 million won ($108,700) by buying shares in a company he knew his corporation would invest in and selling them after the share price went up. The authorities should determine if he and others leaked their corporations’ stock investment plan to relatives and acquaintances.

At the KTP, 29 percent of the entire workforce was caught doing online stock trading - 922 occasions per worker on average - for two years since 2009. The head of its stock investment team earned 200 million won in profits by trading stocks over 247 days - 83 percent of his time at work - during the period.

The BAI recommended the public corporations in question dismiss employees who engaged in stock trading for more than 80 percent of their time at work and take disciplinary action with others. But the prevalence of the problem proves that public companies mete out punishments that are too mild. They should find more effective ways to curb these crooked practices.
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