President Lee Receives Reports from Financial and Fair Trade Commissions on the 19th
Lee: "A Small Group Arbitrarily Exercises Control, This Cannot Be Left Unattended"
Financial Supervisory Service Chief: "Inspections to Begin on Mentioned Financial Holding Companies"
On December 19, President Lee Jaemyung pointed out the emergence of a "corrupt inner circle" targeting the governance structure of the financial sector, stating, "This is not something that should be left unattended."
President Lee made these remarks during a Financial Services Commission work report held at the Government Complex Seoul in Jongno-gu, Seoul, on this day.
He said, "These days, I receive an enormous number of anonymous reports about the financial sector. There are countless complaints about the selection of bank CEOs, claims that certain individuals are bad actors, or allegations of problems in the selection process." Chief of Staff Kang Hoonshik and Policy Chief Kim Yongbeom also added that they have received many similar reports.
President Lee continued, "Many of these claims have a significant degree of validity. For example, it is alleged that the same group of people continuously rotates and monopolizes positions." He added, "Of course, if a moral and competent group were running the financial groups, there would be no issue. But that does not seem to be the case. It appears that individuals serve as chairman, then as bank CEO, and keep switching positions for 10 to 20 years."
In response, Governor Lee of the Financial Supervisory Service reported, "These issues arise largely because the function and independence of the board of directors are severely lacking. There is a structural problem in that the boards of financial holding companies are generally composed of individuals who have some relationship with the chairmen, and this needs to be addressed." He further explained, "We are preparing to launch inspections into the mentioned financial holding companies."
President Lee emphasized, "Because of concerns about government intervention in financial affairs, we have refrained from direct involvement, but as a result, a corrupt inner circle has formed. It is not something that should be left alone when a small group arbitrarily exercises control among themselves."
He added, "While it is important to improve the system, it is crucial to at least exercise the authority we have to prevent highly abnormal situations from occurring."
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