 |
Photo courtesy of Yonhap News |
[Alpha Biz= Paul Lee] Allegations have emerged that the Financial Supervisory Service (FSS) intervened in the selection process for the head of the Korea Accounting Standards Board (KASB), while the regulator has remained silent on the matter.
According to Edaily on the 28th, controversy has grown after the candidate who ranked first in the recommendation process was ultimately not appointed, raising concerns over the fairness and transparency of the selection procedure. The affected candidate is reportedly considering filing a formal complaint and pursuing further action.
At the recommendation committee meeting held earlier, Professor Han Jong-soo of Ewha Womans University received five votes, ranking first, while Professor Kwak Byung-jin of KAIST received two votes. The committee consisted of representatives from seven institutions, including the Financial Supervisory Service, Korea Exchange, Korea Listed Companies Association, Korea Federation of Banks, Korea Financial Investment Association, Korean Institute of Certified Public Accountants, and the Korean Accounting Association.
However, during the general assembly held on the 19th, the result was reversed. Professor Kwak received nine votes, defeating Professor Han, who received four, and was subsequently appointed as the new head of the KASB. The general assembly included not only the seven institutions represented on the recommendation committee, but also additional members such as the Life Insurance Association of Korea, General Insurance Association of Korea, KOSDAQ Listed Companies Association, and the Korea Federation of SMEs, bringing the total to 13 voting organizations.
This marks the first time since the establishment of the KASB in 1999 that the top-ranked candidate in the preliminary selection process failed to be appointed as president. Given past practice, in which the top-ranked candidate was typically selected, the outcome has sparked significant debate within the industry.
According to Edaily’s reporting, some member organizations that participated in the general assembly received phone calls from the FSS shortly before the vote. An industry source said that an FSS official contacted them to ask which candidate they intended to support, without providing further explanation. The source added that they responded by saying they would follow established precedent.
This has fueled speculation that voting behavior may have shifted particularly among financial institutions under the supervision of the FSS.
It is highly unusual for the FSS to show direct interest in the appointment process of the KASB president. Some industry observers suggest that the regulator may have exercised behind-the-scenes influence following criticism from certain media outlets and civic groups regarding Professor Han’s past positions on the Samsung Biologics accounting controversy, which differed from those of the FSS.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
