Park Jong-won, president of the Korea-U.S. Strategic Investment Corp., denied allegations that a side agreement was behind the transfer of $2.4 billion, the first installment of South Korea's investment in the United States. He said a review of the Alaska liquefied natural gas project is still underway.
Park said "it was not a secret deal" when asked by Rep. Park Soo-young of the People Power Party whether a separate agreement had been reached on the first transfer, during a parliamentary audit by the National Assembly's Finance and Economy Planning Committee on the 20th.
The corporation wired $2.4 billion (about 3.2 trillion won) to the U.S. side on the 1st to invest in Project Star, a combined-cycle gas power plant project in Encinal, Texas.
Rep. Park noted that the memorandum of understanding allowed up to 45 days after notification for the transfer, yet the money was disbursed the day after the U.S. announcement. He asked whether a separate agreement had been withheld from the National Assembly and demanded that the terms be submitted.
Park Jong-won said the corporation received the funding request in September and that the two governments agreed to complete the transfer by Sept. 30 U.S. time. He said, however, that the related documents would be difficult to submit publicly for security reasons.
Cho Seung-rae, chairman of the committee, said the Texas project had been reported to the Assembly as calling for about 10% of the total investment to be transferred by the end of September following an agreement and a briefing to lawmakers. "My recollection is that the nuclear project would move to concrete work and that Alaska would begin a review," he said, proposing that the documents from the time be examined even if only in a closed session.
Lawmakers also questioned why the corporation's risk management committee met only after the first transfer. "More than 3 trillion won was sent at once, and the risk management committee met afterward," said Rep. Lee Jong-wook of the People Power Party. "Isn't the selection of investment projects the biggest risk of all?" The panel held its first meeting on the 13th.
Park Jong-won replied that the project management committee and the steering committee met repeatedly during the selection process and that risks were reviewed as thoroughly as possible along the way.
On the Alaska LNG project, he said the review "has not yet been completed," adding that a decision on whether to invest can be made only after examining factors such as commercial viability.
Separately, Park Il-young, president of the Korea Investment Corp. (KIC), said of planned investments in domestic strategic industries through a new strategic investment account starting next year that the fund would "communicate closely with the National Assembly so that the law is amended within this year and investment can begin next year."
When Rep. Kim Nam-joon of the Democratic Party of Korea called for stronger conflict-of-interest controls, noting that the reemployment status of 58 of 86 former executives and staff could not be confirmed, Park Il-young said the fund restricts new transactions for a set period with affiliated institutions that hire its former employees. "There are limits to relying on voluntary reporting because of privacy rules, but we will address the gaps," he said.