Saenuri offers bill to keep tycoons in check

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Saenuri offers bill to keep tycoons in check

The Saenuri Party yesterday proposed a legal measure that will bar tycoons convicted of economic crimes from holding major stakes in a financial business.

Representative Lee Lee-jae of the Saenuri Party, a member of the conservative ruling party’s task force on the economic democratization campaign, yesterday proposed bills to revise four laws governing the non-banking financial institutions in order to strengthen the screening of their major stakeholders.

Lee’s proposal is the fourth in a series of legal measures proposed by the Saenuri Party to push forward its economic democratization pledge.

Lee proposed to revise four laws - the Insurance Business Act, the Specialized Credit Financial Business Act, the Financial Investment Services and Capital Markets Act and the Mutual Savings Banks Act - to bar unethical businessmen from controlling financial firms.

Under Lee’s proposed plan, a person convicted of embezzlement or breach of trust under Article 3 of the Act on the Aggravated Punishment of Specific Economic Crimes will be barred from becoming a major shareholder of a non-bank financial institution such as an insurance company or a securities firm.

The current law governing the banking sector already bars conglomerates from owning banks.

The Act on the Aggravated Punishment of Specific Economic Crimes is applied to cases in which a suspect has made more than 500 million won ($442,600) in profit through embezzlement or breach of trust.

Under the proposal, a tycoon convicted of serious economic crimes will be forced to dispose of his or her stakes in a financial company. If the convict fails to follow through with the punishment, a punitive fine will be imposed.

“One of the main reasons that triggered the recent crisis involving savings banks was the embezzlement and breach of trust committed by the major stakeholders,” Lee said. “Unethical capitalists must be barred from entering the financial business and those who have already entered must be expelled.”

Lee also proposed that a financial company must undergo a routine evaluation every one or two years in addition to the initial qualification screening.

“Because it is hard to expect self-restraint and self-regulation from a capitalist,” Lee said, “the National Assembly needs to urge strict regulations with laws.”

The proposal still grants an exception to the businessmen already convicted of economic crimes or currently standing trial for the charges under the principle of non-retroactivity.

Hanwha Group Chairman Kim Seung-youn, convicted of embezzlement and breach of trust last month and jailed immediately after the initial sentencing, and SK Group Chairman Chey Tae-won, currently standing trial since his prosecution in January over the similar charges, will be the exceptions.

The Saenuri Party said it will cooperate with the liberal opposition Democratic United Party to pass the bills. A similar bill was proposed by Representative Kim Ki-sik of the DUP on Aug. 30.

Representative Lee’s proposal was the latest in a series of efforts by the Saenuri Party to implement its economic democratization campaign, a key pledge of its presidential candidate Park Geun-hye.

The conservative ruling party already proposed three measures to strengthen punishments for economic crimes of businessmen, to bar conglomerates from having unfair trades with their affiliates and to ban large business groups from making any new circular investments. Yesterday’s proposal was the fourth of its kind.

By Ser Myo-ja []

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