Korea’s 18 state firms fail in government management performance review

2022.06.21 13:40:07 | 2022.06.21 13:40:45

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More than a dozen South Korean public enterprises including Korea Land & Housing Corporation and Korea National Railway failed in government performance review for poor management over the last year, drawing penalties including dismissal and pay cut.

The Public Institution Management Committee on Monday announced results of its 2021 management review on the country’s public enterprises.

The evaluation was conducted by a team of 109 private experts including professors, accountants, and partners formed by the finance and economy ministry in February on the performance of 130 institutions including 36 public enterprises and 57 quasi-government institutions on a scale of 100 points.

In the annual grading 18 enterprises including LH, KORAIL, and Korea Racing Authority failed.

As result Korea Maritime Transportation Safety Authority CEO would be dismissed and chiefs of three institutions received warning. Executives of 11 enterprises that logged net losses will have to voluntarily return their annual bonuses.

Korea East-West Power was the only enterprise that received the highest S grade, becoming the first state-owned company that has received the satisfying mark in 10 years for its achievement in preventing safety-related accidents and promoting ethical management. It debt ratio also stood at 102.1 percent, the lowest among public energy firms.

Korea South-East Power, Korea Expressway Corporation, and 21 other institutions received outstanding A grade and 48 including Yeosu Gwangyang Port Authority and Korea Hydro & Nuclear Power B grade. Forty others were graded with C, including Kangwon Land and Incheon International Airport Corporation.

Fifteen institutions including Korea Racing Authority, LH, and Grand Leisure Korea, received D grade and KORAIL, Korea Postal Logistics Agency, and Korea Maritime Transportation Safety Authority E grade.

Heads of enterprises that receive E or D for two straight years are subject to dismissal. In this year’s management assessment, total eight institutions fall in the category – LH, KORAIL, Korea Racing Authority, Korea Maritime Transportation Safety Authority, Korea Postal Logistics Agency, National Institute of Ecology, and Korea Construction Equipment Safety Institute, and Korea Creative Content Agency.

The 18 institutions with D and E grades and 14 with fatal accidents will be required to submit improvement plans to the finance ministry. Institutions with D and E grades will also face 0.5~1.0 percent cut in next year’s current cost and their employees will be excluded from receiving bonuses.

The public committee also advised chiefs, auditors, and executive directors of KEPCO and its 9 subsidiaries and 11 public firms that logged net losses last year to voluntarily return bonuses.

By Lee Jong-hyuk, Lee Hee-jo, Song Gwang-sup, and Lee Eun-joo

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