Deputy Prime Minister and Finance Minister Hyun Oh-seok said that the government will tame excessive borrowing and executive pay at state-owned enterprises and put their finances under control.

In a meeting with chief executives of 12 state-run enterprises on Thursday, the deputy prime minister warned them that “the party is over,” saying that the government will put a stop to their relentless greed for higher bonuses and salaries, and overleveraging.

“The party is over now. We should face reality and try to find a solution to the problem that concerns the state-run enterprises,” the finance minister said.

From now on, the government is to tighten its oversight of public firms to refurbish the public images of their top executives, seen negatively for receiving excessive pay and benefits, regardless of whether or not the companies performed well.

The deputy prime minister said that the time is ripe to regain public trust by drastically overhauling management systems at state-run companies and institutions.

The press and the National Assembly have criticized and branded state-run enterprises as companies weighed down by corruption and reckless management. Also, executive posts at such companies have been long perceived to be overly comfortable and paid much more than they are worth.

“If (state-run enterprises) were private companies, they would have faced frequent restructuring,” Hyun chided in front of the 12 executives including those of Korea National Oil Corp., Korea Gas Corp. and KORAIL.

“We will devise special measures forbidding reckless management after closely probing whether state-run companies have wasted their budgets and given too much in benefits (to executives).”

The finance minister added that it will come up with a new benchmark system for executive pay and introduce tougher measures that would allow related government agencies to evaluate where their state-run enterprises have offered excessive benefits.

Government agencies will order those found to have failed to meet satisfactory management standards to “correct” themselves.

The government will also closely look at the books of all public enterprises, including those that met with the Finance Ministry on Thursday, by the end of this year to see how and why their debt ballooned during the previous administration.

By Park Hyong-ki (hkp@heraldcorp.com)