Bravery to trade a district head job for stocks

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Bravery to trade a district head job for stocks

Published: 17 Oct. 2024, 19:45 Updated: 17 Oct. 2024, 19:47

Moon Hun-il, administrative head of the Guro District Office in southwestern Seoul, resigned from office after he lost a lawsuit against the government order to surrender his shareholding due to a conflict of interest during his term. The district must hold a by-election costing billions of won of tax funds as the result. Moon ran his candidacy under the People Power Party (PPP) in the Guro district in the 2022 local elections to beat his Democratic Party (DP) rival by 8,000 votes in the district that had been reigned by the same DP chief for three terms. Moon is the founder of an ICT equipment company based in the area for nearly 30 years. He has shares valuing 17 billion won ($12.5 million) in the company of 400 employees.

Under the law, an elected public official must sell or place any stockholding worth more than 30 million won in a blind trust, which amounts to selling as the blind trust must liquidate the shares within 90 days.

Moon protested to the blind trust committee under the government, arguing against the relatedness to his new job. When his plea was struck down, Moon took his case to the administrative court only to lose the lower as well as the appellate court.

A blind trust of stock provision was added to the Public Service Ethics Act in 2004 to prevent a clash of interests between a public official and shares he or she represents. Despite the justice of the cause, the provision has become a stumbling block to recruit candidates from the private sector.

Hwang Chul-joo, the founder and CEO of chip equipment maker Jusung Engineering, withdrew from the presidential nomination in 2013 as the minister of SME and Startups because he had to give up his shareholding. But the case for elected officials can be different. The candidate would have known the conditions and downsides to the office he or she must sacrifice to serve the people who voted for them. Since a local district office has the say in various land, environmental and tax regulations, potential favoritism for a company in the same jurisdiction cannot be overlooked.

Moon may have thought he was safe as he retired from the chairman’s position and the company moved out of the district. But the fact that he cannot depart with the largest shareholder’s position means that he could be minding corporate affairs while he headed the district. We can only assume that he regarded the district office as a side job.

The cost of Moon’s diversion is dear. The district would have to go through another election in April next year, causing a vacuum in leadership until then. The new chief is guaranteed for a little more than a year as the next local election is due in June 2026. The PPP must atone for its misjudgment and keep to its promise that it won’t field a candidate in the location should its choice cause a by-election.