There are a growing number of voices calling for past corporate accounting fraud to be ignored and looked over. On Friday Prime Minister Lee Hae Chan publicly said that within the first quarter companies would be for doctoring with their account books. All you can conclude is that the government has decided to stand on the side of the corporations and table their own Securities Class Action Lawsuit Act. It's pathetic, and it leaves you wondering just what the Participatory Government's economic philosophy is.
It seems the government is accepting at face value the concerns of big business, which says it will be caught up in class action lawsuits if the new law takes effect as scheduled. The concerns of big business are just that, concerns on the part of big business. Predicting how many companies could face lawsuits is not easy. Currently there is not even substantive analysis of what the situation is. The government is hurting its own consistency of policy to be overturning a policy overnight when that policy was agreed on after years of controversy and when it is doing so based on unsure predictions of what will happen.
Realistically it is even likely the new law will become a "paper tiger," contrary to big business's concerns. When it made the class action lawsuit act in 2003, the government accommodated business concerns to a considerable degree and set strict preconditions for filing lawsuits. Large law firms even decided they would not be handling class action lawsuits. One can predict that filling one will not be easy even if the law takes effect on schedule.
Lee says that though a limited period of past account book manipulation would be exempted from prosecution, future cases of fraudulent book keeping will be dealt with strictly. Oh how nice that would be, but realistically speaking it would be hard to expect that to happen. Just like the corporations say, falsifying financial records was a "common practice." That practice, however, will not disappear without a price being paid. If the government shows any sign of a weak position the corporations will again demand amnesty. The government must quit with the naive idea that companies will do what they're supposed to if it lets them go just this once.
The Hankyoreh, 29 January 2005.
[Translations by Seoul Selection (PMS)]
[Editorial] Forever Forgiving Accounting Fraud? |
