Gov’t proposes revising civil servant asset rules

In the aftermath of the latest botched appointment of a successful businessman to public office, the government said yesterday it will try to modify the current system requiring senior civil servants to place their stocks in a company related to their position in a blind trust and sell them off within 60 days.

The move was made after Hwang Chul-joo, CEO of Jusung Engineering nominated by President Park Geun-hye as her point man to oversee policies on small- and medium-sized businesses, abruptly gave up the nomination Monday due to concerns about his personal assets.

Following the incident, the Ministry of Public Administration and Security said yesterday it will come up with a plan so successful entrepreneurs can serve the public.

“There are concerns that the current system dissuades talented entrepreneurs from taking public office,” said Kim Seok-jin, senior ethics official of the ministry.

“We will review a plan to allow the founder of a business or the largest shareholder with management control to place their stocks in a trust without immediate disposal.”

Under the current law, a senior public servant owning shares worth more than 30 million won ($26,990) in a company that could pose a conflict of interest must sell the assets either directly within a month or through a blind trust within 60 days.

The relationship between a nominee’s post and his or her stocks is determined by an evaluation committee, composed of nine members named by the president, National Assembly and the Supreme Court chief justice.

Lawmakers who hold large stakes in businesses are required to serve in standing committees that are not related to their businesses to avoid conflict of interest. The ministry said the modified system will still require senior officials to place their stocks in a blind trust, but the shares won’t be disposed. Additional safeguards will be created to bar officials from selling the shares or exercising their voting rights at the shareholders’ meetings.

If the stocks in reserve yield profits during the owner’s tenure, the proceeds will be returned to the society, the ministry said.

“To change the system, the Public Service Ethics Act needs to be revised, so it will ultimately be decided by the National Assembly,” Kim said.

After the legislature approved the revision to the Public Service Ethics Act in 2005, the current system of blind trust was applied to senior officials.

Last year alone, the evaluation committee reviewed 399 cases for top officials including ministers, lawmakers, senior judges and prosecutors.

Entrepreneur-turned-lawmaker Jhun Ha-jin of the Saenuri Party said he had disposed of all his stocks when he became a National Assembly representative but he also thought at the time that the requirement was absurd.

“I will prepare a revision bill to the Public Service Ethics Act without harming the original intent,” he said through his social network homepage.

The Korea Federation of Small and Medium Business yesterday called for a revision. “It is a great loss to the nation’s economy because unreasonable laws practically blocked talented entrepreneurs from serving public offices,” the federation said.

Lee Chang-won, professor of public administration at Hansung University, told the JoongAng Ilbo he agrees with the need to offer opportunities to talented businessmen to serve public offices, but the ministry’s idea of requiring them to surrender the profits from their stocks in reserve is unrealistic.

Representative Kim Ki-sik of the main opposition Democratic United Party said the ministry’s initiative to revise the current system is unacceptable.

“The Blue House and Hwang both made mistakes by failing to understand the system and its purpose properly,” Kim told the JoongAng Ilbo. “And now they are misleading the public as if the system was flawed.”

By Ser Myo-ja [myoja@joongang.co.kr]