Immorality of the top brassA high-ranking defense official is suspected of insider trading, according to the latest disclosure of properties acquired by senior government officials. The wife of Bang Hyo-bok, president of the state-run Korea Institute for Defense Analyses, owned 4,348 shares in Simnet, a local manufacturer of military exercise simulators, the disclosure said.
There are serious ethical questions to be raised as to why the wife of the head of a defense think tank, which is in charge of directing and researching the country’s defense industry, owns stocks in a supplier of defense equipment. The company has been and is still involved in various defense procurements.
Bang has access to inside information from both the government and company, and can exercise influence in awarding new contracts. Moreover, his wife’s company is not listed, meaning its shares are not for sale to the public. So the wife of a senior military official possessing shares in the company requires explanation.
Several lieutenant generals and their family members face similar suspicions. Kim Yoo-keun, an Army corps commander, and Park Sam-duck, president of Korea National Defense University, had shares in military ammunition producer Poongsan, and the wife of Han Dong-joo, a lieutenant general, had shares in Korea Aerospace Industries. They recently sold off their shares. Auditors at the Korea Institute for Defense Analyses said they did not think much of the shares of the president’s wife because “they had been on a passable scale.” Their explanation underscores the lack of morality among military officials because if they possess shares in the defense industry, it can cause controversy.
The Ministry of Defense needs to investigate possession of defense industry equities by military officials and their family members. It also must draw up regulations for stakeholders in the defense industry. Military officials are in a better position to invest in defense shares because they can access information in government procurements and therefore should be heavily regulated or banned.
JoongAng Ilbo, April 1, Page 30
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