[Inside Chodong] Prosecutor Republic and Selective Fairness

If Administrative Discretion Is Abused, It Becomes 'Power'
A Fair Organization Must Be Guaranteed by the System

(Photo by Crime City movie scene capture)

[Asia Economy Reporter Ji Yeon-jin] "Why should there be a reason? You just catch the bad guy."

In the movie "The Outlaws 2," which attracted 10 million viewers this year, veteran detective Ma Seok-do (played by Ma Dong-seok) said this while struggling to catch "Kang Hae-sang" (Son Seok-gu), who committed heinous crimes in Vietnam. Although Vietnam is far outside the jurisdiction of Geumcheon Police Station, which is Detective Ma's "nawabari" (territory of influence), his line that catching criminals is the police's "job" regardless of the reason became a "refreshing relief" for audiences longing for justice.

Since President Yoon Seok-yeol, a former Prosecutor General, took office, there has been much criticism of a "Prosecutor Republic," as prosecutors have occupied key public positions. Even the Financial Supervisory Service (FSS), the reporter's own jurisdiction, appointed a former prosecutor as its head for the first time since its establishment. FSS Governor Lee Bok-hyun showed an unusual investigative instinct from his inaugural speech by mentioning a reinvestigation of the Lime scandal, which caused damages exceeding 1.6 trillion won. In fact, since Governor Lee's appointment, the FSS has been actively investigating to the extent that it seems to be waging war against financial crimes.

First, the FSS handed over the allegations of stock price manipulation related to Edison EV (now Smart Solutions), a KOSDAQ-listed company acquired by Edison Motors, which entered the takeover battle for Ssangyong Motor last month, to the prosecution as a fast-track case. In May last year, management control of Edison EV was transferred to Energy Solution, whose largest shareholder is Kang Young-kwon, CEO of Edison Motors. At that time, the stock price, which was only around 6,000 won, soared to 82,400 won on November 8 after news of Edison Motors' participation in the Ssangyong Motor takeover battle became known. Six investment associations, including DMH and SLH, which had purchased about 40% of Edison EV shares since early last year, sold most of their shares as the stock price surged, making significant profits. The Ssangyong Motor acquisition eventually failed, and Edison EV's stock trading was suspended in March this year due to an "audit opinion refusal" by an accounting firm. An FSS official said, "The fact that the case was handed over to the prosecution as a fast-track case means the FSS judged that stock price manipulation occurred."

The FSS also established a short-selling investigation team, which began operations this week. Investigations are underway into foreign securities firms frequently involved in short selling, which has drawn complaints from individual investors. At an emergency financial market situation meeting held the day after the domestic stock market plunged due to the U.S. Jackson Hole meeting, Governor Lee said, "We will promptly investigate illegal short selling and strictly punish illegal and unfair acts." Earlier, the FSS also showed swift handling by unusually announcing interim results related to the Woori Bank embezzlement incident and the abnormal foreign exchange remittance controversies involving Shinhan and Woori Banks.

What is concerning is the selective disclosure of FSS investigations. Administrative power inevitably involves discretion, and abusing discretion becomes power. If some cases are disclosed to the media due to high public interest while others are withheld because they attract less attention, the decision to disclose can become a form of power. The prosecution has long been criticized for wielding unchecked power through its prosecution rights. Of course, Governor Lee revealed the illegal merger and accounting fraud of Samsung Group during his time as a prosecutor, demonstrating an investigation without sanctuary. However, a fair organization can only function properly when guaranteed by a system, not by individuals.

Lee Bok-hyun, Chief Prosecutor of the Seoul Central District Prosecutors' Office, is announcing the investigation results of the Samsung Group's illegal merger and accounting fraud case at the Seoul High Prosecutors' Office press room on the afternoon of the 1st. 2020.9.1

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