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[Editorial] Do not overstep

Authorities should take hands off management decisions of private businesses

A committee entrusted to select the CEO of Hana Financial Group has decided to ignore the government’s pressure and go ahead with its plan to pick a candidate next Monday.

The committee deserves praise for its decision, which is bold in view of relations between financial companies and government agencies that exercise regulatory and supervisory rights.

It would also be good if the case brings fresh public attention to the practice of politicians and government officials interfering with the appointment and management affairs of private businesses.

What distinguishes the Hana case from many other similar cases is that officials did not hide their views and tried to interfere with the operation of the committee openly.

As the nomination committee started its work, senior officials of the financial authorities took issue with its composition and rules. Most of all, they insisted that the nomination process was favorable to incumbents who seek reappointment.

Choi Jong-ku, head of the Financial Services Commission, said that “prolonged rule by one man” is a major problem with some financial groups. It is an open secret that he was referring to Kim Jung-tai, the current chairman who seeks his third term as the head of Hana Group.

Then officials at the FSC -- the chief financial regulator -- and the Financial Supervisory Service -- the top watchdog of the financial industry -- added pressure on the committee to delay the nomination.

Their logic was that financial authorities had been investigating Hana, and Kim, for their alleged involvement in a corruption and influence-peddling scandal involving the ousted President Park Geun-hye and her confidante Choi Soon-sil.

They also cited the ongoing investigation into allegations about the illicit hiring of employees.

The investigations may find serious wrongdoings on the parts of Hana Group and Kim, which, the officials argue, could force the group to face a “leadership vacuum” if the re-elected Kim resigns or faces criminal punishment.

Therefore, the officials say that the appointment of the new CEO should not be made until the investigations are over.

A more troubling aspect of the Hana case is that officials -- breaking away from the past in which they tried to exert their influence as covertly as possible -- stepped in, in a brazen, unabashed manner.

One senior official of the FSC attended a meeting of the Hana nomination committee to deliver the government’s position. A few days later, the financial watchdog sent an official document regarding the call to delay the nomination procedure.

Granted, heads of major financial groups should have high levels of ethical and moral standards. In view of this, the allegations surrounding Hana and Choi are not minor problems.

Most of all, there were testimonies that KEB Hana Bank gave a special promotion to a senior staff member at the request of Choi. The bank is also suspected of having lent preferential loans to an information technology firm run by people close to Choi, who is now in jail for a slew of corruption and influence-peddling charges.

But the scandals -- and the investigations into them -- cannot justify government officials’ interference with the operation of the nomination committee.

FSC and FSS officials argued that if serious wrongdoings were to be found after the appointment, there may be a leadership vacuum, which would have a negative impact not only on Hana Group but also the entire financial sector.

This is sheer exaggeration. Do government officials have to step in to prevent or deal with leadership vacuums -- if there are any -- in major conglomerates like Samsung and Hyundai Motor just because they account for big portions of the national economy?

If Hana and its executives are found to have done anything wrong, it has only to take due action in line with the law, company rules and the opinions of its shareholders. If necessary, the bank could select a new CEO.

Yoon Jong-nam, head of the nomination committee, pointed out that Hana Financial Group is not run by the government. We cannot agree more with him. In fact, foreign investors account for more than 70 percent of Hana’s shareholders.