[2022 National Audit] "Discussion on Securing Site for San-eun Headquarters Relocation to Busan... Allegations of Illegal Administration"

[Asia Economy Reporter Buaeri] Allegations have been raised that the Financial Services Commission, Korea Development Bank, and Busan City are pushing for the relocation of KDB to Busan despite the lack of legal amendments.

According to the 'KDB Busan Relocation Promotion Plan' received by Kim Seong-ju, a member of the National Assembly's Political Affairs Committee from the Democratic Party of Korea, from the Financial Services Commission on the 19th, the FSC and KDB have already completed practical consultations with Busan City last April.

The site is a vacant lot within the Busan Munhyeon Financial Complex, and Busan City has planned a total project cost of 400 billion KRW. The headquarters building is planned to be constructed with approximately 45 floors.

Article 4, Paragraph 1 of the Korea Development Bank Act stipulates that the head office of KDB shall be located in 'Seoul Special City.' Therefore, an amendment to the Korea Development Bank Act is necessary for KDB's relocation to Busan. The related legislation is currently pending in the standing committee. Until the law is amended, relocating KDB's headquarters to Busan is illegal.

The FSC plans to transfer the core functions of the headquarters to Busan, while selecting and retaining tasks that must remain in Seoul to maintain competitiveness.

Criticism has been raised that the plan to transfer the core functions of the headquarters to Busan is merely a wordplay to avoid accusations of violating the law regarding KDB's relocation to Busan.

Moreover, considering that the core function of KDB's headquarters is policy finance and fund supply through market participants, the plan is contradictory, Kim pointed out.

As a policy finance institution, collaboration with companies is paramount for KDB, but 72.3% of domestic listed companies have their headquarters located in the Seoul metropolitan area. In other words, the core functions of the headquarters intended to be relocated to Busan under the plan correspond to tasks that inevitably must remain in Seoul to maintain competitiveness.

Kim said, “The current law stipulates that KDB's headquarters be located in Seoul because it was judged necessary for KDB to faithfully perform its core tasks,” adding, “Pursuing KDB's relocation to Busan without legal amendments is an illegal administrative act.”

He added, "It is necessary to carefully examine what national benefits can be gained through relocating KDB's headquarters to Busan and whether the justification for relocating the headquarters to Busan while leaving core functions in Seoul is valid."

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