Lee Jae-myung: "Only Demanding Guaranteed Profits Is the Same Principle as Banks Wanting Fixed Rates When Interest Rates Fall"

Lee Jae-myung's October 20 National Assembly Audit
Non-adoption of Excess Profit Recovery
Embezzlement Allegations...Direct Rebuttal

[Image source=Yonhap News]

[Asia Economy Reporter Koo Chae-eun] On the 20th, Lee Jae-myung, the Democratic Party presidential candidate, used the analogy of fixed and variable interest rates regarding the non-adoption of the excess profit recovery clause at the National Assembly Land, Infrastructure and Transport Committee's audit. He also stated that excess profit recovery and fixed confirmed profits were conflicting demands and could not be implemented together.

He said, "As a simple example, if a bank expects interest rates to rise, it would choose variable interest rates, and if it expects them to fall, fixed interest rates. At that time, our prediction was that the real estate market would likely worsen, so we secured fixed profits."

He emphasized, "The firm policy of Seongnam City at the time was to prevent accounting manipulation that inflated costs and to stop public official lobbying," adding, "At that time, it was uncertain whether development profits would rise or fall."

Candidate Lee explained, "If profits rise more than predicted due to an upturn in the real estate market, it would be common sense to share the burden (risk), and if profits fall below predictions, the burden should also be borne." Conversely, he added that if confirmed profits were fixed and the structure was such that even when land prices rose further, the profits belonged to Seongnam City, then (cases like Hwacheon Daeyu) could be considered embezzlement by private companies.