Grimy appointments

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Grimy appointments

Controversy is again brewing over influence peddling in appointments for heads of state-owned financial institutions. At the center of the new suspicions is the so-called Sogeumhoi, a group of financiers who graduated from Sogang University, the alma mater of President Park Geun-hye. As it turns out, KDB Daewoo Securities President Hong Sung-guk, who took office after months of dispute; Lee Duk-hoon, who got the top seat at the Export-Import Bank of Korea in March; and Chung Yun-dae, CEO of Coscom, a Korean financial IT solutions company, are all members of the exclusive club. Furthermore, the president and auditor of the Export-Import Bank of Korea are both from Sogang University. We can hardly view this as coincidence.

The controversy over the Sogeumhoi reached a peak with the last-minute decision by Woori Bank CEO Lee Soon-woo to give up his job as head of one of the country’s large private banks. In emails to management and workers on Monday, Lee, who is not a member of the Sogang clan, expressed his intention to quit his job as CEO - just a day before a committee opened to recommend candidates for the top post - even though he was one of the strongest candidates and working hard for reappointment. Market watchers attribute his sudden departure to outside pressure. Lee Kang-goo, vice president of the bank, will replace Lee as the new CEO.

The problem is that financial authorities were voluntarily leaking his de facto nomination as new head to pave the way for the former CEO to resign. It all adds to the criticism that the inner circle from Sogang University has taken the place of “gwanfia” - a portmanteau of gwalyo, the Korean word for bureaucrats, and mafia - which refers to close ties between the government and businesses.

You can’t pick the head of a bank with 250 trillion won ($225 billion) in assets in such a way. Citizens vividly remember what the four financiers from Korea University - the alma mater of former President Lee Myung-bak - did for our financial sector. At the time, executives and staff members of major banks rushed to the Blue House and the National Assembly to land decent jobs. As long as this type of anachronistic and grimy appointment culture prevails, the balanced development of our banks is a distant dream. That is precisely why Korea still doesn’t have a bank in the world’s top 100.

Yet the financial authorities claim that they have no power when it comes to the appointments of the CEOs of banks. The government must calm suspicions over the Sogeumhoi, not because Vice President Lee lacks qualifications to be Woori’s new CEO, but because it could lead to another crisis originating from the Sogang clique. It’s time to end our outdated appointment pattern once and for all.

JoongAng Ilbo, Dec. 3, Page 34

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