The messiest swan song
Sung Wan-jong, former head of Keangnam Enterprises, climbed Mount Bukhan in suit pants and dress shoes. Not long before, he had given a lengthy interview to the Kyunghyang Shinmum. One of his trouser pockets contained a 56-word memo with names, dates and money amounts to match the story he told the reporter. When he hanged himself from a tree branch with a necktie, he left his two cell phones on nearby. Obviously, Sung did not plan on going quietly.
A tycoon well-acquainted with the ways of our political actors meticulously planned his last act and scene. And as he undoubtedly expected, the audience was shocked. The final blast of whistle-blowing by Sung Wan-jong landed like an atomic bomb on the ruling party camp. The presidential office and Saenuri Party are in a state of total shock. The rival New Politics Alliance for Democracy cannot believe its windfall. When the prosecution first embarked on a probe of Keangnam Enterprises, which was believed to have enjoyed favoritism in overseas resources investments led by former president Lee Myung-bak, the opposition demanded a thorough investigation into Sung, a so-called business protege of the former president. Now the highly active businessman-turned-legislator has become a kind of poster boy for shady dealings and the main opposition party claims it will do all it can to find out the truth in order to ensure that Sung did not die in vain - and that maximum political mileage can be wrung from his suicide.
Politicians believed Sung made the ultimate sacrifice because he felt betrayed by the ruling party after generously supporting politicians for years. But financiers who looked after Sung’s businesses have a different take. They believe money is at the heart of his tragic end. The Export-Import Bank, which was the primary bank for his company, said Keangnam Enterprises was always a problem because it built its business on connections with politicians and financial authorities. Shinhan Bank also complained that the company was a headache because it had insisting on new loans although it was evident the company’s balance sheet was off-kilter. The audacious demands from the company put financial authorities in an awkward position of having to press banks to extend it new loans.
Keangnam’s demise started with the Hanoi Landmark Tower, a 72-story skyscraper the company completed in 2011 at a cost of $1.05 billion. It took two to three years to attract tenants while negotiations with the InterContinental Hotel dragged on. When the tower finally opened for business in 2012, the real estate market in Vietnam was in a slump. Sung tried to sell the company but refused to settle for a discounted offer of 900 billion won ($820 million).
A slump in construction at home and abroad proved a fatal blow to Keangnam. The company recklessly pursued projects based on loans overseas and at home. The corruption probe into the Haengdame-do island development project took a toll on Keangnam. Other major construction companies squeaked by because they were affiliated with large conglomerates. Keangnam and Ssangyong Construction went into debt workout programs. The company was brought back from the dead by the four-rivers restoration project led by former president Lee. But after that project wound down, the company went back into the red in 2013.
Sung managed to get special pardons twice and his company was able to graduate from a debt workout early through his political connections. He used all his power to weasel out of the recent troubles as well. All of the ruling party bigwigs confessed they received phone calls from him. But the world has changed and his days of influence have passed. They advised him to get a good lawyer and cooperate with prosecutors. He stepped down from the management at Keangnam and all his wealth was lost. His brothers had to pay his lawyer fees.
We cannot predict the chaos and damage that will result from the Pandora’s Box Sung opened in his final hours. He is said to have planned his departure well as he had met with his money delivery man, his bagman, shortly before he committed suicide. The people he aimed at in those final hours are at the top of Korea’s governing power. How far prosecutors can, or will, go in investigating this case remains unknown. Some already say this is a job for special prosecutors who could have more independent power. It’s too early to make a conclusion. We must wait and watch our local version of “House of Cards” unfold. We will find out whether the scandal is a deadly blow to the incumbent administration or ends up in a dramatic twist helping to clean up society. Whatever the ending will be, one thing is for sure: It won’t be a pretty one.
JoongAng Ilbo, April 14, Page 30
*The author is an editorial writer of the JoongAng Ilbo.
by Lee Chul-ho