Private Equity Fund Scandal... Financial CEOs' Mass Summons Unavoidable at National Audit Session

The First Audit of the 21st National Assembly in October
Possibility of Summoning Multiple Financial CEOs

[Image source=Yonhap News]

[Asia Economy Reporter Park Sun-mi] As the private equity fund scandal has become one of the core issues in the financial sector, it is expected that CEOs of financial institutions will be summoned one after another to the National Assembly audit scheduled for October, the first audit of the 21st National Assembly. Due to the impact of the novel coronavirus disease (COVID-19), excuses such as overseas business trips and vacations have disappeared, making attendance unavoidable when witnesses are requested, putting them in an awkward situation.

According to the National Assembly and financial sector on the 19th, members of the National Assembly’s Political Affairs Committee have not yet finalized who will be called to the audit regarding the private equity fund scandal. With about two months remaining until the audit, they plan to finalize the issue review and soon proceed with selecting witnesses. Once the audit schedule is confirmed, the Political Affairs Committee secretariat will begin compiling the witness list, at which point it is expected that the outline of who will appear at the audit will become clear.

Political and financial circles anticipate that many financial sector CEOs will be named as witnesses in this audit. As the private equity fund scandal has emerged as a major issue this year, it may be inevitable to request the attendance of CEOs of banks and securities firms responsible for poor sales, and even chairpersons of financial holding companies.

A financial sector official familiar with National Assembly affairs said, "When the Political Affairs Committee received the first business report from financial authorities including the Financial Services Commission and the Financial Supervisory Service at the end of last month, the focus was on the private equity fund scandal being due to poor supervision by financial authorities and incomplete sales by financial sales companies," adding, "It was clear that lawmakers from both ruling and opposition parties were firmly determined regarding the private equity fund scandal." He added, "In the past, when financial accidents occurred, the heads of the involved companies were included in the witness application list. This year, the names of major financial company representatives involved in the private equity fund scandal will likely appear on the witness application list."

With concerns about the resurgence of COVID-19 ahead of the audit, financial company CEOs cannot use excuses such as overseas business trips, international forum attendance, or vacations to avoid witness attendance requests. Some speculate that financial companies may actively engage in preemptive efforts to clarify that the responsibility for the private equity fund scandal does not rest solely on the poor sales by sales companies.

However, even if CEOs are included in the witness application list, the fact that interest in the private equity fund scandal is somewhat waning provides a 'breathing space' for financial companies. In fact, within the opposition lawmaker offices preparing for the audit, it is reported that they face a dilemma as they must focus on 'hot issues' that are highly controversial, and most of the additional information related to financial companies involved in the private equity fund scandal has already been exhausted.

This content was produced with the assistance of AI translation services.