Another malodorous appointment

The government may be incapable of learning from mistakes as it is poised to send yet another outside director to Daewoo Shipbuilding and Marine Engineering without any experience in shipbuilding industry during a time when the dockyard is under existential angst.

Worse, the appointment took place when the government and creditors are under fire for ruining the shipbuilder through revolving-door practices and questionable placements that led to mismanagement and lax oversight. The company in a disclosure statement over the weekend said Cho Dae-hwan, an advisory lawmaker with private legal firm Daeoh, would be voted in a shareholder’s meeting as outside board director. He was chosen in a review committee comprising of the chair and other board members.

Cho has nothing to do with the industry. He had been lurking about the political arena ever since he quit public service in prosecution. He served as an outside member advising on the law and order and public safety in the transition committee after President Park Geun-hye was elected. He was recommended by the Saenuri Party to the parliamentary special committee investigating the Sewol ferry crisis in January, but was kicked out in June for triggering a conflict.

Ill-placements out of political consideration are one big reason the shipbuilder is in current pitiful state. The company paid 60 so-called advisers receiving annual salary of nearly 100 million won since 2004. Most of them were retirees from its major creditor Korea Development and various government offices. Of 30 outside directors that served since 2000, 18 or 60 percent had been either a bureaucrat or politician without any relation to shipbuilding. The company’s management neglected the company building a deficit of more than 5 trillion won over the last five years because their outside managers had little will nor ability to run or supervise the shipbuilder. It’s
outrageous that the government is thinking of sending another poor candidate to oversee the company.

How can the government and creditors expect to persuade the employees facing layoffs and people with the rationale of injecting more tax funds to the troubled shipbuilders and shippers when they go on with irresponsible appointments without show of repent for their role in ruining the companies.

The government and KDB must immediately retract the appointment and thoroughly investigate how such selection could have been made at this stage. They should have maintained the minimum decency when pleading for public understanding and support for restructuring program.

JoongAng Ilbo, May 31, Page 26.