Yi Whan-woo is a Korea Times journalist primarily covering finance. He writes in-depth articles on macroeconomy and financial markets and previously covered sports, politics, diplomacy and inter-Korean affairs, among others. Feel free to contact him at yistory@koreatimes.co.kr.
KDB chairman faces uncertain future
Korea Development Bank (KDB) Chairman Lee Dong-gull speaks during a press conference at KDB's headquarters in Yeouido, Seoul in January. Yonhap
By Yi Whan-woo
DSME CEO appointment puts Lee in hot seat
By Yi Whan-woo
Korea Development Bank (KDB) Chairman Lee Dong-gull is finding himself increasingly exposed to unfavorable circumstances in completing his term through September 2023, with a dispute over the appointment of a new CEO of Daewoo Shipbuilding & Marine Engineering (DSME) adding to uncertainty concerning his future.
The state-run KDB is the main creditor of debt-ridden DSME, with a controlling stake of 55.7 percent.
The DSME CEO dispute comes as the latest in a series of rows between the outgoing and incoming administrations of President Moon Jae-in and President-elect Yoon Suk-yeol in picking the next chiefs and other senior figures of government-affiliated entities outside Cheong Wa Dae and the Cabinet.
The conflicts have involved the leadership of the Bank of Korea and the Board of Audit and Inspection. Yoon's presidential transition committee was displeased with Moon for trying to exercise his rights until the last minute in order to fill in the posts without consulting Yoon sufficiently.
In addition, Lee, a Moon loyalist, has been targeted by Yoon's transition committee after Park Doo-sun, a longtime friend of the president's young brother, was appointed CEO of DSME for a three-year term, Thursday.
KDB and DSME explained Park's appointment was not politically motivated, and that the decision was made independently by the shipbuilder's emergency committee aimed at normalizing its management, with KDB injecting trillions of won of taxpayer money over the years.
The transition committee, however, suspects Moon may have influenced the decision.
It also suspects Lee was behind KDB's failure to comply with its repeated requests addressed to financial regulators to manage DSME accordingly.
In its requests, the transition committee urged government-affiliated entities to refrain from reshuffles of top personnel for the time being as part of the preparations for a smooth transition of power.
“It remains uncertain why KDB did not notify DSME of our requests,” Won Il-hee, deputy spokesperson of the presidential transition committee, said during a press briefing, Thursday.
Calling the appointment of the new DSME CEO an “irrational decision,” Won went onto say any responsible figures are possibly in breach of the law due to an abuse of power.
Won did not specifically point his finger at Lee. However, he brought up the career history of the KDB chairman in what is seen as a bid to underline Lee's relationship with the President and implicitly hint at Lee's possible involvement in the DSME CEO appointment decision.
Lee remains the sole KDB chairman under Moon's five-year presidency, beginning his first three-year term in 2017 and being reappointed for another three years in September 2020.
A progressive-minded economist, he was vice chairman of the Financial Services Commission in the early years of the 2003-08 Roh Moon-hyun administration. Moon was also Roh's chief of staff.
Lee was criticized in September 2020 for lacking political neutrality. He then proposed a toast hoping for the liberal government to remain in power for the next 20 years, during a ceremony to mark the publication of then-ruling Democratic Party of Korea (DPK) Chairman Lee Hae-chan's autobiography.
The KDB chairman has been an outspoken critic of Yoon's plan to relocate KDB's Seoul headquarters to Busan, in the name of balanced regional development, calling it “a plan to regress, not progress.”
His remarks fueled speculation that the incoming Yoon administration may put him on the list of chiefs of state-run institutions to be forced out regardless of their remaining terms.
KDB's botched sales of DSME in January and SsangYong Motor, a debt-ridden carmaker also under the bank's control, in late March, are considered as possible excuses for the incoming government to sack Lee.
“Yoon will not ditch Lee abruptly because it will only worsen the political divide,” said Shin Yul, a political science professor at Myongji University. “Still, it is fair game for Yoon to bring up differing policy directions between him and Lee and let him quit voluntarily.”