Prudent probe necessary
The prosecution’s investigation of Posco E&C on suspicion of creating a slush fund will likely expand to all of Posco Group, the sixth-largest business group in Korea. Prosecutors banned former and current executives, including former Chairman Chung Joon-yang, and other employees from traveling overseas and summoned financial officers. The investigation will focus on charges of embezzlement and breach of trust in the course of raising the secret reserve of cash, as well as charges they were involved in the acquisition of subsidiaries at unreasonably high prices and tax evasion.
Considering that Chung, who was appointed head of the steel giant in February 2009 during the Lee Myung-bak administration, contributed to the financial deterioration of the group during his five years as CEO through March 2014, the prosecution must get to the bottom of the case.
Founded in 1968, Posco has emerged as a symbol of Korean industrialization. The company was named “most respected enterprise in Korea” and “one of the largest 200 global companies” even after privatization in 2000. The prosecution must apply the strictest standards to bring any colluders to justice because they have left an indelible stain on Posco’s reputation. However, unceasing controversy over the transparency of the investigation also threatens a political maelstrom. Pundits have come up with the analysis that the prosecution will kickstart a full-fledged investigation into suspicions about influence peddling by confidants of former President Lee and corruption in the personnel management and business administration of Posco Group. It also will investigate their roles in the run-up to the company’s massive investment in securing natural resources overseas.
The Park Geun-hye administration follows in the footsteps of former governments. The so-called third year syndrome of the presidency shows a routine pattern: As the incumbent government’s grip on power weakens, it starts to mobilize law enforcement agencies to get rid of political enemies and regain some power. The prosecution kicked off investigations of Posco just a day after Prime Minister Lee Wan-koo’s announcement of a scheme to uncover government corruption after consulting with the Blue House.
The public is cautiously watching developments. If the investigation is aimed at attacking political foes ahead of the general election next year, the government cannot get public support. We hope the prosecution does its job well without hurting the viability of an iconic Korean company.
JoongAng Ilbo, Mar. 17, Page 30