Porous asset scrutiny systemsThe investigation into charges against a senior prosecutor for corruption picked up steam after prosecutors learned that gaming company Nexon provided money to Jin Kyung-joon, a former chief prosecutor of the Korea Immigration Service, who has been accused of using insider trading to earn 12 billion won ($10.4 million) from his shares in Nexon.
The question is, why are we learning about this just now? Jin held these shares for 11 years.
In 2005, the prosecutor borrowed 425 million won from Nexon to purchase 10,000 of its shares. He has not paid any interest on that loan.
As a prosecutor, Jin was required to report his personal wealth and assets according to the Public Employees’ Ethics Act. Regular prosecutors must report their personal wealth to the Supreme Prosecutors’ Office, and senior-level prosecutors must report to the State Ethics Committee.
But since reports are made at the end of the year, any irregularities in financial transactions could go unnoticed if they are repaid and fixed by then. This is how Jin’s borrowings from Nexon were excluded in his asset report at the end of 2005.
Even as Jin held those shares in Nexon, he was placed at the financial tax audit bureau of the Seoul Central District Prosecutors’ Office. The stock trust committee of the Ministry of Personnel Management is suspected of neglect in its review of Jin’s shareholdings related to his job when it approved the appointment.
Currently, holdings in shares of foreign entities that are unlisted in Korea are exempt from the local ethics code. The ministry claims it decided Jin’s shares in Nexon Japan would not affect his work. But if it looked carefully, it could not have reached such a conclusion.
Jin’s suspicious behavior raises questions for him as well as for government offices. The ethics committee only handed out administrative penalties to Jin. With such a lenient attitude, more government officials will be tempted to seek easy money through stocks. Without fixing the loopholes, the asset registration system for government employees will become just a formality.