Lee Dong-geol, Chairman of Korea Development Bank, Compares Daejang-dong Development Project to Theft, Calling It an "Unpredictable Matter"
Ruling and Opposition Lawmakers Raise Concerns Over His Remarks
[Asia Economy Reporter Gong Byung-sun] Lee Dong-geol, chairman of the Korea Development Bank, sparked controversy by stating at the National Assembly audit that excessive profits generated from the Daejang-dong development project are a common occurrence. Lawmakers from both ruling and opposition parties raised concerns about Chairman Lee's perception.
On the 15th, during the National Assembly's Political Affairs Committee audit, in response to a question from Kim Byung-wook, a member of the Democratic Party of Korea, asking, "What are your thoughts on the Daejang-dong development project?" Lee replied, "This is something that can commonly occur in financial institutions and the financial industry." He added, "If profits increase even slightly, an additional 200 to 300 billion won is inevitable," and "In the case of common shares with a small equity ratio, astronomical profits can be generated."
Chairman Lee also disagreed with lawmakers from both sides who likened the Daejang-dong development to theft. In response to a question from Yoon Joo-kyung of the People Power Party, asking, "Isn't the Daejang-dong project, which yielded profits 1,154 times the investment, theft?" Lee answered, "This is a matter that cannot be prejudged." He explained that because the overall project profit is very large, even a slight increase in profit significantly raises the total scale. Furthermore, since the capital is very small, leverage can be very high, but risks also follow.
Regarding criticism that many citizens are angry and disheartened by the excessive profits from Daejang-dong, Chairman Lee said, "It is very dangerous to prejudge based solely on the fact that such effects have occurred," and added, "Do not unilaterally impose your opinions on me."
Lawmakers from both ruling and opposition parties raised issues with Chairman Lee's remarks. Yoon Joo-kyung expressed disappointment, saying, "At the very least, I expected Chairman Lee would not speak like that," while Min Hyung-bae of the Democratic Party of Korea said, "Answering that explosive unearned income is a common occurrence only emphasizes the nature of financial institutions," and urged, "Please deeply consider ways to make such 'theft designs' impossible."
Subsequently, Yoon Jae-ok, chairman of the Political Affairs Committee, gave Chairman Lee an opportunity to correct his statement by saying, "Please clarify that this is not something that commonly occurs." Chairman Lee then clarified, "I meant to say that it is theoretically possible, not that it frequently occurs in the real world."
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