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Minister Hyun Oh-seok |
"I think the party is over," Hyun said during a meeting with heads of public firms at the Banker's Club in Myeongdong, Seoul. "It's time to face reality and the problems at state-owned companies, and seek solutions."
He strongly criticized the questionable ethics and snowballing debt at state-owned enterprises.
"Executives and employees at public firms have enjoyed excessive benefits and job security, even though their companies were in crisis," he said. "They would have gone through large-scale restructuring several times if they were private firms."
Hyun's remarks came after state-owned firms were attacked for their heavy debts and a string of corruption scandals, as well as showing no signs of improvement despite such criticism.
A recent National Assembly audit also shed light on their poor management.
For example, the amount of debt accrued by state-run firms under the Ministry of Land, Infrastructure and Transport stands at 211 trillion won, accounting for 42 percent of debt accumulated by all state-owned enterprises.
But they are among the highest paying public firms, according to job information portal Saramin.
Analysis by Saramin shows that the highest paying corporation is Incheon International Airport Corp., where newly recruited employees get 39 million won in their first year. Other firms under the ministry that made it to the top 10 list were the Housing Guarantee Corp. and the Korea Airports Corp.
The government has also found that hundreds of fake test certificates for parts and materials used in nuclear reactors currently in operation involved officials from the state-run nuclear power plant operator as well as parts suppliers and certifiers, who were indicted on charges of forgery and corruption.
To tackle problems at public firms, Hyun said the government will reform salary scales for executives, welfare benefits for employees and other "unreasonable" incentive systems. It will also conduct more thorough management evaluations.
The government will also strictly regulate the heavily-indebted 12 public firms, including the Korea Land & Housing Corp., Korea Electric Power Corp. and Korea Water Resources Corp.
It will closely monitor and review their debt status, including the scale and use of debts, and order them to adjust business practices, sell assets and generate maximum profits.
"The government will come out with measures to normalize state-owned enterprises after looking into every issue, from A to Z," Hyun said. "Now, we need more thorough and fundamental changes."