Seoul mayor takes to Facebook on Sunday to hold government accountable for sharp market swings
Calls for disclosure on national pension reallocation and approval of high-risk leveraged products
Demands direct apology to retail investors who suffered losses
Seoul Mayor Oh Se-hoon launched a sharp attack on President Lee Jae Myung on Sunday over the recent volatility in South Korea's stock market.
Oh argued that the government, ahead of local elections, had worked to drive share prices higher by deploying the national pension fund and approving high-risk leveraged products to prop up the market — moves that have since left retail investors nursing heavy losses as share prices tumbled.
In a Facebook post titled "Stock gambling for local elections — stop dodging responsibility," Oh strongly criticized President Lee and the government's market policies.
Citing the recent sharp drop in Kospi and the triggering of a circuit breaker, Oh said share prices had surged to almost unbelievable heights before the election, only to collapse repeatedly afterward. "Is all of this really just a coincidence?" he asked.
Oh particularly took aim at the government's decision to raise the national pension fund's domestic equity allocation and its approval of high-risk leveraged products.
Oh said the government raised the national pension fund's target domestic equity weighting from 14.9 percent to 20.8 percent on May 28, just ahead of the local elections. He criticized the move as turning the fund — which safeguards the retirement security of the public — into a prop for the stock market.
He also said the government had allowed the launch of products that track twice the daily price movements of Samsung Electronics and SK hynix shares before the election. He argued the government had in effect opened a channel for speculative investment by approving high-risk products that amplify both gains when prices rise and losses when they fall.
"The administration led the charge in stoking the illusion of rising share prices, and people staked their savings on that illusion," Oh said. "Middle-aged and older investors put in their retirement funds, while young people poured in money they had set aside for marriage and buying a home."
He then said the market had become "a giant gambling den" in which the government used the national pension fund as seed money to grow the pot and opened the door to high-risk leveraged products to inflate the stakes further.
Oh called on President Lee to personally apologize to retail investors for their losses and to announce concrete measures to address the damage.
"This is not the time for the president to be casually chatting on YouTube about why he posts on social media so often or how well he is sleeping," Oh said. "Apologize directly to the people who trusted the government and took on all-in investments, and announce real measures to stop retail investor losses from spreading further."
In addition, Oh called for public disclosure of who decided to raise the national pension fund's domestic equity allocation and on what grounds, as well as who drove the approval of the high-risk leveraged products and why the process was rushed.
"Those who used the lives of ordinary people as an experiment to burnish the administration's record must be held accountable," Oh said.
seouldream01@heraldcorp.com
