'Mofia' members take control
Lim Young-rok KB Financial Group Chairman
Ex-finance officials enjoy plum jobs
By Kim Tae-jong
Bureaucrats have filled half of the posts of CEOs at state-run financial firms and holding companies, the latest data showed Sunday, renewing concerns over rising bureaucratic control over the financial sector.
The number of bureaucrat-turned-CEOs in the financial sector is expected to further increase, as many of the nominees for top posts of financial organizations have their career backgrounds from the finance ministry.
Of the current total of 26 CEOs of state affiliated financial institutions, 13 of them began their careers at the finance ministry _ nine state-run financial organizations, seven financial associations and 10 financial holding companies.
It shows 50 percent of the positions were taken by people with links to the finance ministry. Industry insiders have coined a new term, “MOFIA,” to refer to these appointees. MOFIA is the combination of MOF, which is an abbreviation of the Ministry of Finance, and Mafia.
Among their ranks are Kim Jung-gook at the Korea Technology Finance Corp.; Kim Joo-hyun at the Korea Deposit Insurance Corp.; Chang Young-chul at the Korea Asset Management Corp. and Chin Young-wook at the Korea Finance Corp.
Woo Ju-ha, CEO of KOSCOM, who has recently offered to resign, is also from the finance ministry. With the exception of Park Jong-soo, chairman of the Korea Financial Investment Association, the chiefs of all the seven are former officials of the finance ministry.
They include Bahk Byong-won, chairman of the Korea Federation of Banks; Kim Gyu-bok, chairman of the Korea Life Insurance Association; Moon Jae-woo, chairman of the General Insurance Association.
Former vice finance minister Lim Young-rok has been selected as a nominee to lead KB Financial Group, the country’s fourth largest financial firm, while the former vice minister of the Ministry of Strategy and Finance Yim Jong-yong has been named as the chairman of the Nonghyup Financial Group.
The proportion of bureaucrat-turned-CEOs in the financial sector will increase, according to sources, as former government officials are expected to replace those who have recently offered to resign. KOSCOM Woo, Korea Exchange CEO Kim Bong-soo and Korea Credit Guarantee Fund CEO Ahn Taek-soo have all tendered their resignation.
Industry insiders strongly criticized the practice, calling it “parachute appointments” accusing the government of seeking to interfere in the management of state firms through these appointments. “The government-led financial policies and government-led appointments are the main factors that have destroyed the nation’s financial industry,” Kim Moon-ho, head of the Korean Financial Industry Union, said in a statement, criticizing the former vice finance minister Lim’s nomination to lead KB Financial Group.
An official from a state-run financial firm also said that bureaucrat-turned-CEOs cannot use their positions to make significant impacts because of their poor experience at such high levels.
“It takes at least six months to one year for such bureaucrat-turned-CEOs to understand what their job is as they lack experience after long service in only public posts,” he said. “So basically, they cannot really make contribution to the development of their organizations.”
Some experts also suggest that there should be a politically-independent personnel committee to review the qualification of nominees for top positions at state-run organizations.