Outside Director's Term Expired but Recommendation Committee Not Formed
Concerns Raised Over Mofia Parachute Appointments
Sueun Union: "Will Request Appointment of Union-Nominated Director Once Committee Is Formed"
[Asia Economy Reporter Kim Jin-ho] The introduction of the labor union-recommended director system at the Export-Import Bank of Korea, which had raised expectations, appears to be virtually slipping into 'uncertainty.' Although the term of former outside director Na Myeong-hyun has expired, the bank has reportedly not yet formed the Outside Director Candidate Recommendation Committee. Some are expressing concerns about so-called 'parachute appointments' of pro-government figures during the final phase of the administration.
According to the bank on the 2nd, although former outside director Na's term ended at the end of last month, there has been no progress in the procedures related to appointing a successor. Initially, the financial sector expected the bank to complete the formation of the recommendation committee by mid-last month, at least two weeks before the term expiration.
However, it has been confirmed that the bank has not yet scheduled a board meeting to form the recommendation committee. A source familiar with internal affairs said, "Neither the board meeting nor the formation of the recommendation committee has taken place yet," adding, "There are talks that a board meeting to form the recommendation committee will be convened soon, but the exact schedule is unknown."
The delay in activating the recommendation committee for appointing outside directors at the bank is primarily due to the replacement rumors of Deputy Prime Minister and Minister of Economy and Finance Hong Nam-ki, which have been circulating since April. If the Minister of Economy and Finance is replaced, it would inevitably have direct or indirect effects on the introduction of the labor union-recommended director system. Outside directors at the bank are appointed by the Minister of Economy and Finance upon the bank president's recommendation.
Despite the recent near-confirmation of Deputy Prime Minister and Minister Hong's retention, the fact that the board meeting to form the recommendation committee has not yet been convened is being criticized as 'too late.' This is because it usually takes more than two months from forming the recommendation committee to the appointment.
Concerns Over Parachute Appointments... Will the Labor Union-Recommended Director System Fail?
Some fear that the 'Mofia' parachute controversy, similar to last year, will reoccur. There is suspicion that the Ministry of Economy and Finance and the bank are delaying to send individuals who suit their preferences. In fact, when the bank's labor union first attempted to introduce the labor union-recommended director system last year, the bank welcomed a former Ministry of Economy and Finance official as an outside director. That outside director was known to have worked closely with President Visit Kyoo at the Ministry of Economy and Finance.
A financial sector official said, "It has been over two weeks since the weight of Deputy Prime Minister Hong's retention, amid replacement rumors, became clear, yet the recommendation committee has not been formed, which is hard to understand," adding, "It could be a simple procedural delay, but there are concerns that a parachute appointment might sneak in if the process drags on."
Meanwhile, the bank's labor union maintains a firm stance to see the labor union-recommended director system through. They plan to recommend candidates as soon as the recommendation committee is formed and compete fairly against the management's candidates. A union official said, "We have already finalized the candidates to be submitted to the recommendation committee," adding, "We will officially demand the appointment of the labor union-recommended director as soon as the committee is formed."
If the introduction fails at the bank, the labor union-recommended director system will effectively lose momentum within the current administration's term. Given that the Moon Jae-in government is facing a lame-duck period, it is expected that no further progress can be anticipated for the system's introduction.
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
