[Alpha Biz= Lee Hyung JIn & Kim Joon Hyun] Controversy is once again emerging over the selection process for the next head of the Korea Accounting Standards Board (KASB). The Board Chair Selection Committee (the “Committee”) has abruptly decided to introduce an English-language interview after earlier disputes over candidate exclusions, raising suspicions that the move is intended to favor a specific individual in coordination with the Financial Services Commission (FSC).

According to reporting by Alpha Biz on December 6, the Committee recently altered its interview format for KASB chair candidates to an English interview. It was later confirmed, however, that the decision was not made unanimously.

A source familiar with internal committee discussions told AlphaBiz, “Just as the selection process was regaining stability after Chairman Jung Eun-bo of the Korea Exchange pushed to disqualify certain candidates in advance, the Committee’s unilateral move to introduce an English interview has made it virtually impossible to ensure fairness.”
The source added, “Chairman Jung pushed forward with the English interview despite opposition from several committee members, citing the need for ‘global competitiveness.’”

Multiple senior officials in the financial authorities echoed similar concerns, saying, “It appears the Committee, led by Chairman Jung, may be attempting to eliminate or boost certain candidates in alignment with the FSC.” They further noted that “an English interview overwhelmingly benefits academic candidates, especially professors.”

The officials added that candidates perceived as unfriendly toward Samsung may be at a disadvantage in an English-language test—an important point given that Samsung Life Insurance’s plan to turn Samsung Fire & Marine Insurance into a subsidiary has heightened scrutiny over how international accounting standards will be applied, thereby making KASB independence a critical issue.
(For background, see Alpha Economy’s Oct. 14 report on allegations of Samsung’s influence in the KASB chair appointment process.)

Concerns about favoritism began spreading rapidly among candidates after the Committee reduced the weight of existing preferential criteria and suddenly introduced an English interview component.

AlphaBiz contacted Chairman Jung Eun-bo and members of the Committee several times—via mobile phone and text messages—to inquire about allegations of attempting to remove Samsung-unfriendly candidates or favor a specific individual, but received no response.

Six candidates have applied for the position: Professors Han Jong-su (Ewha Womans University), Jung Seok-woo (Korea University), Kim Wan-hee (Gachon University), and Kwak Byung-jin (KAIST); former lawmaker Chae Ibae; and Park Kwon-chu, adviser at Kim & Chang.

Industry observers believe the race has effectively narrowed to a top three: Professor Han Jong-su, former lawmaker Chae Ibae, and adviser Park Kwon-chu.

Economist and public administration scholar Han Chi-ho commented, “If the English interview proceeds as planned, it is not difficult to predict that Professor Han Jong-su of Ewha Womans University will effectively be positioned as the leading candidate.”
He added, “If the Committee and the FSC have indeed colluded in the selection process—which must remain independent—there should be a thorough investigation by the Board of Audit and Inspection.”

The Committee plans to shortlist two candidates after English interviews on December 11, and then recommend a final candidate for the KASB chair position on December 18.

 

 

 

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