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Newspaper Chief Appropriated Loans

Posted August. 17, 2006 03:34,   

한국어

It was revealed that the director of The Korea Newspaper Circulation Service (KNCS) Kang Gi-seok appropriated private loans for operating expenses.

A stir is expected over this affair because it is an unprecedented event that a government-run organization borrowed money from private loans.

The chief presidential secretary for civil affairs Jeon Hae-cheol stated, “It seems Kang has run KNCS through poor administration, borrowing private debts this May,” while releasing the investigation result on the dismissal of former Vice Minister of Culture and Tourism Yoo Jin-ryong.

According to the investigation of Cheong Wa Dae, KNCS Director Kang took out private loans when the organization suffered a temporary setback due to the transfer delay of 9 billion won from ten billion won, which was originally earmarked this year.

An official of the Ministry of Planning and Budget (MPB) said, “Government-affiliated organizations make it a principle to spend money based on how much revenue they earns, but KNCS seems to break this rule. There is no precedent like this.”

Bae Kuk-hwan, MPB’s Public Innovation Headquarters chief, said, “Make a judgment on conventional views,” without mentioning further details.

Some criticisms has been raised that Kang’s borrowing of private debts goes against the articles of The Korea Newspaper Circulation Service.

Article 15 of the organization specifies that matters of raising funds and acquisitioning properties should be subject to the decision of the board.

In regard to this, Kang told us, “I borrowed 200 million won from an acquaintance who is running a business and a relative, 100 million won from each, not from private loans, and all debts were paid back when budgeting was executed. It was natural decision under the situation in which execution of the budget is delayed.”

Shin Cheol-shik, MPB’s public relations chief on government policy, said, “Budgeting of the KNCS is a kind of ‘conditional investment,’ which means the budget is executed only after a definite plan is prepared. If executed, it could not be able to allocate budget next year because it (executing budget without firm plans) is considered inadequate execution of the budget.”

Hyun Jin-kwon, a professor of economics at Ajou University, said, “The fact that a chief of government-run organization borrowed money has a different meaning that an individual does. It is undesirable for this kind of problem to happen since public sectors have to be managed more clearly than nongovernmental sectors.”