Ridiculous appointment plan
K-Growth said to be entrusting New Deal Fund to amateur
Korea Growth Investment Corp. (K-Growth) is expected to pick a former administrator of the presidential office, who's ignorant of investment management, to take charge of a 20 trillion won ($17.2 billion) "New Deal Fund" that includes 7 trillion won in government policy funds.
Its board of directors is said to have decided to appoint Hwang Hyun-seon as chief of the recently created Second Investment Division if he is elected as a director at the shareholders meeting on Sept. 16.
Korea Growth Investment Corp. is a limited company established to help small-venture businesses, but it is regarded as a de facto public enterprise because state-owned banks hold equity in it.
The government plans to raise 7 trillion won from its budget by 2025 and then attract 13 trillion won from the private sector, including the general public, to create the New Deal Fund. The fund will be invested intensively in renewable energy and digital infrastructure projects.
The division does not only manage the fund, but also a 2 trillion won corporate restructuring fund.
A high degree of expertise and experience in asset management should be required from the chief of the division.
In addition, the fund includes taxpayers' money.
When it comes to employing someone who will take responsibility for the outcomes of asset management, it is an ironbound rule to put the top priority on related expertise and past achievements.
Hwang falls far short in those areas. He built his career in the political arena. He was an aide to a lawmaker, held a post in the secretariat of the ruling Democratic Party of Korea, worked for Moon Jae-in's 2017 presidential campaign and served as an administrator in the office of the senior presidential secretary for civil affairs after Moon took office. He entered Cheong Wa Dae in May 2017 and worked under Cho Kuk, then senior secretary for civil affairs, for two years.
He has no experience in asset management. He is ignorant of finance.
It makes no sense at all to appoint an inexperienced person to manage state project investments. He is said to have no asset management certificate either -- a basic qualification for fund managers. What does a person who vetted nominees know about cutting-edge technologies and finance?
Also, in March 2019 when he changed from a Cheong Wa Dae administrator to a standing auditor of UAMCO, a corporate restructuring and bad debt management company, his lack of related expertise caused controversy. His credentials were called into question and people wondered if he had gotten the job through connections with Cheong Wa Dae.
Moon vowed shortly after being inaugurated that his administration would not appoint outside figures close to the current regime to high-ranking posts in affiliated organizations.
But it has already appointed several former Cheong Wa Dae officials to senior posts in public organizations, including a standing auditor of the Korea Financial Telecommunications and Clearings Institute, a nonstanding auditor of the Korea Land and Housing Corp. and a director of the Korea Elevator Safety Agency. According to the Financial Economy Institute's analysis of 437 directors of 39 financial institutions who were working as of late last year after being appointed or reappointed by the Moon administration, 138 or 31.6 percent of them were pro-Moon figures or retired bureaucrats.
Heads of about 200 public organizations are scheduled to complete their terms of office before the end of the year. Former staff members of Moon's presidential campaign, figures close to the president and former ruling party lawmakers are said to be competing behind the scenes to land those posts.
With Moon's presidency nearing its end, those who have worked for the president are seemingly too preoccupied with snapping up senior jobs in public organizations to pay attention to potential investment losses.
It is irresponsible and risky to leave it up to an inexperienced figure to manage a fund that may have great influence on the national economy. If poorly managed, the fund will eat excessively into taxpayers' money. The decision to appoint an unqualified candidate must be withdrawn.
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