President Moon Jae-in’s latest choice to head the Ministry of SMEs and Startups is coming under increasing fire, bringing ruling and opposition parties to once again butt heads.
Hong Jong-haak, a former lawmaker and economics professor, was tapped to lead the newly established ministry on Oct. 23.
Minister of SMEs and Startups nominee Hong Jong-haak (center) speaks to reporters in Seoul on Oct. 25. Yonhap
The presidential office claimed that Hong was “the right man to create a healthy economic ecosystem centered on SMEs and startups” using his understanding of the new administration’s economic policies.
The opposition parties, however, have honed in on Hong’s actions while serving in the 19th National Assembly, and his personal wealth.
The value of assets held by Hong and his immediate family rose from 2.17 billion won ($1.93 million) in 2012, to about 5.58 billion won this year.
Much of the rise came from Hong’s mother-in-law giving real estate to his daughter and wife. His wife and daughter each received a 25 percent stake in a building valued at over 3 billion won. At the same time as receiving her share, Hong’s 13-year old daughter received a loan of about 220 million won from her mother to cover the gift tax. The loan is said to have been extended to the teenager with interest.
Hong has since revealed that his daughter pays the interest to her mother from her share of the rent from the building.
While in the parliament, Hong was a vocal critic of wealth being passed on from one generation to another, calling for larger inheritance and gift taxes when assets are passed down skipping a generation in a family.
He had also stated that inheritance and gift taxes should be raised when the amount involved exceed 3 billion won.
Citing the changes in Hong’s assets, and the views he expressed in the past, opposition parties are calling for him to step down as the minister nominee, accusing the administration of breaking its own personnel management standards.
“It is incredible that (Hong) uses all sorts of means to pass on his own wealth, but he can still viciously criticize others passing on their wealth,” Liberty Korea Party spokesperson Rep. Jun Hee-kyung said.
The more moderate Bareun Party has also criticized Hong, saying that he should step down before the confirmation hearing scheduled to begin on Nov. 10.
The ruling Democratic Party of Korea maintains that Hong is the right man to execute the Moon administration’s economic reform plans.
“(Hong) is a man who will perform well in the duties of the Ministry of SMEs and Startups, such as innovative growth policies, and improving unfair contractor-contractee relations,” Democratic Party floor leader Rep. Woo Won-shik said on Monday.
Regarding allegations against Hong, Woo said that related issues should be left to the confirmation hearing process.
“Whether (Hong’s inheritance) involved illegal actions for the purpose of tax evasion is something that should be vetted calmly in through the confirmation hearing.”
By Choi He-suk (cheesuk@heraldcorp.com)
