The seemingly endless controversies involving Hong Ky-ttack, a vice president of the Asian Infrastructure Investment Bank, show that a combination of personal greed and President Park Geun-hye’s misuse of her right to appoint senior officials has resulted in another disaster.
As in similar cases, much of the blame for the latest mishap should go to Park, who is good at assigning the wrong people to the wrong posts. At the base of the problem is her preference for those who helped her election campaign or people she personally knows well.
Hong, a career economics professor, was one of Park’s advisers during the 2012 campaign and went to serve as a member of her transition team. Two months after she took office in February 2013, Park named Hong as the CEO of the Korea Development Bank, the biggest policy bank.
The appointment was not received well, because Hong lacked experience and expertise in policy lending. Critics said his personal ties to Park -- they went to the same university -- and participation in her campaign landed him one of the most-coveted jobs in the financial sector.
As it turned out, the skepticism had been well-founded. One need look only at what happened at the state-run policy bank while he was its chief -- especially its unbelievably damnable management of Daewoo Shipbuilding and Marine Engineering Co.
The same questions about his qualifications and credentials were raised when he resigned as the KDB CEO two months ago to jump to the post of vice president for risk management at the AIIB. There is no doubt that Park was behind the Seoul government’s choice of him for the AIIB post.
Then we got the dumbfounding news that Hong went on a leave of absence for six months, making the decision unilaterally with little consultation with the government in Seoul.
The post of the chief risk officer is very important for the fledging bank. As one of the five vice presidents, Hong also was expected to make sure Korea – the fifth-largest contributor – is fairly represented at the regional bank. Moreover, geopolitics is also at stake since South Korea’s allies like the U.S. and Japan have yet to join the AIIB due to their rivalry with China.
It is against this backdrop that the Seoul government endeavored to secure a top executive post at the AIIB. Now Hong has put all the efforts to secure national interests in jeopardy.
It is widely believed that Hong took a leave of absence because of the escalating controversies over the KDB and DSME. The money-losing shipbuilder is undergoing a massive investigation into various irregularities, including book cooking that covered up huge losses. One of its former CEOs has already been put into custody on suspicions of graft and breach of trust.
As its largest shareholder and creditor, the KDB has been pinpointed as a major culprit for the disastrous management of the DSME.
As public criticism mounts over the KDB, Hong tried to defend him and the KDB. In a recent media interview, he said that all key decisions -- like the one under which the KDB provided the DSME with 4.2 trillion won in relief fund -- were made by Park’s chief economic lieutenants and the bank had only an adjunct role.
The episode showed that Hong was apprehensive about the possibility that investigation into the DSME may reach the KDB and him eventually.
Then what he had to was resigning from the AIIB post, instead of trying to buy time. It is utterly selfish and irresponsible for him to leave such an important post – not only for the bank but also his home country – for six months.
By now, Park may regret her appointment of Hong. It is obvious what her next step should be if she does not want to have further regrets.
