Controversy Over Parachute Appointments in Financial Public Enterprises

[Asia Economy Reporter Park Sun-mi] The controversy over 'parachute' appointments in financial public enterprises has resurfaced.

According to the financial sector on the 1st, there has recently been controversy over the appointment of a parachute figure with unrelated experience to the new auditor position at a financial public enterprise.

KAMCO (Korea Asset Management Corporation) appointed Lee In-su (56), former Vice Chairman of the Cambodia Securities Exchange, as its new auditor. Lee was appointed by the President after going through a public recruitment process, review and recommendation by the executive recommendation committee, resolution by the Public Institution Management Committee, and proposal by the Minister of Strategy and Finance.

However, despite Lee’s long career in the financial sector, he is evaluated as lacking the expertise and experience necessary to perform the auditor role at KAMCO. The KAMCO labor union views Lee as a parachute appointee and opposes his appointment.

Born in Daegu in 1964, he graduated from Seoul National University with a degree in law and completed a master's program at Indiana State University Law School in the United States. After joining the Securities Supervisory Board (now Financial Supervisory Service) in 1990, he worked for about 30 years at the Korea Futures Exchange and Korea Exchange.

The Korea Deposit Insurance Corporation (KDIC) has also been embroiled in parachute appointment controversy. On the 26th of last month, KDIC appointed Lee Han-gyu, former Policy Director of the Democratic Party Policy Committee, as its new auditor.

Lee is known as a pro-Democratic Party figure who served as an aide to Kim Jin-pyo, former Deputy Prime Minister for Economic Affairs and Democratic Party lawmaker, senior budget and settlement expert at the Democratic Party Policy Committee, planning division expert at the National Policy Advisory Committee, and Policy Director of the Democratic Party Policy Committee. However, he has no experience related to deposit protection or financial institution soundness management.

Park Yong-jin, a Democratic Party lawmaker on the National Assembly’s Political Affairs Committee, raised concerns during this year’s national audit about the serious issue of former economic officials holding leadership positions in financial institutions, calling it a case of preferential treatment for former officials. He argued, "This parachute culture and clique culture are hindering financial reform, making urgent institutional improvements necessary." Analyzing the status of former Ministry of Strategy and Finance and Financial Services Commission economic officials in 117 financial institutions including banks, securities firms, life insurance companies, and associations over the past six years since 2015, it was revealed that there are a total of 207 economic officials working in financial institutions, with 45 of them in public institutions, the highest number.