Controversy Over New Appointments of Shinbo Executive Director and Auditor
4 out of 10 Executives at 8 Financial Public Institutions Involved in 'Parachute Appointment' Debate
[Asia Economy Reporter Kim Jin-ho] Strong criticism is emerging in the financial sector as it is reported that individuals with little financial expertise are aiming for key positions in major financial public institutions. There are concerns that "parachute appointments" are rampant in the financial sector toward the end of the Moon Jae-in administration.
According to the financial sector on the 4th, the Korea Credit Guarantee Fund (KODIT) is embroiled in rumors regarding the nomination of its standing director and auditor. It is reported that a mid-level official from the Financial Services Commission and a former bank executive with no policy finance experience have been nominated for the standing director and auditor positions, respectively.
KODIT plans to finalize the appointments of successors to Standing Director Park Chang-gyu and Auditor Shin Dae-sik as early as this month. Park and Shin’s terms expired on October 13 and October 14, respectively. Currently, KODIT is conducting an Executive Candidate Recommendation Committee (ECRC) to find their replacements.
The issue is that amid some delays in the appointment process, rumors of nominations are circulating both inside and outside KODIT. A source familiar with internal affairs stated, "I understand that a mid-level official from the Financial Services Commission and a former CEO of a Woori Financial Group affiliate have been nominated as successors to Park and Shin."
The KODIT labor union is vocally opposing these rumors, shouting "firm opposition to parachute appointments." Especially as the Moon Jae-in administration nears its end, voices criticizing the excessive prevalence of "parachute appointments" in the financial sector are growing louder, suggesting that controversies and conflicts are expected during the upcoming appointment process.
The union is particularly protesting the standing director appointment, calling it a "job-sharing" between the Ministry of Economy and Finance and the Financial Services Commission. Traditionally, the standing director at KODIT serves a basic term of two years and is usually extended once for an additional year, totaling about three years. The fact that the current Standing Director Park, who is from the Ministry of Economy and Finance, is leaving immediately after serving two years is unprecedented and raises suspicions.
A union official criticized, "Ignoring tradition and unilaterally swapping positions is a typical closed-door personnel practice among central government officials. Holding an Executive Candidate Recommendation Committee after nominating a standing director internally is just for show to secure legitimacy."
The official also pointed out, "The nominated auditor has only been in the private sector, so there may be a lack of understanding of policy finance." For the auditor position at KODIT, the internal ECRC searches for candidates, the Ministry of Economy and Finance recommends candidates, and the president decides on the appointment.
Meanwhile, concerns about the chronic issue of "parachute appointments" tend to rise as administrations approach their end. In September, controversy erupted when a former Blue House administrative officer with no financial experience was appointed head of Korea Growth Finance Corporation. Similar parachute appointment controversies have recently surfaced at the Korea Securities Depository and the Korea Housing Finance Corporation.
In particular, Asia Economy recently reviewed the executive status of eight financial public institutions (the Korea Inclusive Finance Agency, Korea Credit Guarantee Fund, Korea Deposit Insurance Corporation, IBK Industrial Bank of Korea, KDB Industrial Bank, Korea Securities Depository, Korea Asset Management Corporation, and Korea Housing Finance Corporation) through the Public Institution Management Information System (ALIO) and found that 4 out of 10 executives were not free from parachute appointment controversies.
A financial sector official remarked, "Regarding the parachute appointment issue, many expected the Moon Jae-in administration to be different from previous governments because it emphasized fairness, but looking back over the past four years, there was not much difference."
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