Prices of Golf Memberships Held by 3 Major State-Owned Banks Total 15.8 Billion Won... Is Public Innovation Just for Show?

Pretending Reform by Disposing of Relatively Cheap Memberships
Criticism of 'Emperor Golf' as Exclusive to a Few Executives
"Usage Rules and Details Must Be Transparently Disclosed and Managed"

It has been revealed that the three major national policy banks in Korea (KDB Industrial Bank, Korea Eximbank, and IBK Industrial Bank) hold golf memberships worth a total of 16 billion KRW. Among these, there is an ultra-high-priced membership valued at 3.6 billion KRW. The usage details are kept 'in the dark.' There is criticism that these memberships are practically exclusive to the heads of the institutions or a very small number of executives, serving as a privilege for 'emperor golf.' Although the government is pushing for innovation in the public sector with the message that 'the party is over,' changes on the ground remain insufficient.

According to data submitted by the three major national policy banks to the office of Kim Sung-joo, a member of the National Assembly's Political Affairs Committee from the Democratic Party of Korea, on the 16th, IBK Industrial Bank held the highest total value of golf memberships at 7.426 billion KRW (10 accounts). This was followed by KDB Industrial Bank with 6.143 billion KRW (3 accounts), and Korea Eximbank with 2.248 billion KRW (1 account). These amounts are based on the acquisition prices, not current market values.

KDB Industrial Bank holds a Blackstone Country Club membership in Jeju valued at 3.577 billion KRW, the most expensive single account. It was purchased in 2010 during the tenure of former chairman Min Yu-sung of San-eun Financial Group (the predecessor of KDB Industrial Bank), and the price reflects the acquisition cost from 13 years ago. The bank also acquired a Crystal Valley membership at a golf course in Gapyeong, Gyeonggi Province, for 2.3 billion KRW in 2005, 18 years ago. KDB Industrial Bank stated that it is difficult to determine the current market value of these two golf memberships, which were purchased for tens of billions of won long ago.

Korea Eximbank purchased one membership at Korea Country Club in Yongin, Gyeonggi Province, in 2009 for 2.248 billion KRW. Among the golf memberships held by IBK Industrial Bank, the most expensive was the Lakewood membership in Yangju, Gyeonggi Province, purchased in 2015 during the tenure of former president Kwon Sun-joo, valued at 1.511 billion KRW.

Unlike private commercial banks, there have been past criticisms that it is inappropriate for national policy banks, which use government budgets, to hold such high-priced golf memberships worth tens of billions of won. However, each time, the national policy banks only made superficial reforms by selling some of the relatively lower-value memberships. For example, in July last year, when Deputy Prime Minister and Minister of Economy and Finance Choo Kyung-ho ordered strong innovation by declaring "the public institution party is over," KDB Industrial Bank only disposed of the relatively inexpensive Castlelex membership (acquisition price 817.6 million KRW) while retaining the ultra-high-priced memberships. They are currently trying to sell the Jungbu Country Club membership, which was acquired for 267 million KRW, but when asked about selling the Blackstone and Crystal Valley memberships, which are about ten times more expensive, they responded that they "cannot confirm" any plans.

These national policy banks claim that the ostensible purpose of acquiring expensive golf memberships is for "marketing and external business activities." The problem is that they do not manage usage records. There are no records or even related regulations. KDB Industrial Bank responded to inquiries about golf usage by saying, "Individual employees use the memberships autonomously for external marketing and business promotion purposes necessary for business," and "We do not separately manage individual employees' reservations or usage records."

Korea Eximbank also stated, "Since users bear the full cost personally, we do not manage usage records." However, they added, "We plan to review the establishment of related regulations according to the asset efficiency plans for each institution included in the 'Public Institution Innovation Guidelines' announced by the Ministry of Economy and Finance in November last year." IBK Industrial Bank also said, "We do not collect or manage usage records."

Because of this, it is impossible to determine whether these golf memberships are officially used for business purposes. In reality, there are criticisms that the heads of the institutions or some executives almost monopolize the memberships and enjoy them as if they were 'welfare benefits.'

Assemblyman Kim Sung-joo said, "The opaque management of golf club memberships by national policy banks has been pointed out for a long time but has not improved," and added, "If national policy banks, which use taxpayers' money, inevitably have to hold high-priced memberships worth tens of billions of won, they need to at least transparently disclose and manage usage regulations and usage records." He emphasized, "The Yoon Seok-yeol administration, which said 'banks are public goods,' should start by selling off the ultra-luxury golf memberships of national policy banks and transparently manage them to demonstrate its commitment to public institution reform."