National Pension Service criticized over investment blunders

SEOUL, Sept. 19 (Yonhap) -- Lawmakers on Monday criticized the national pension fund over its poor and unethical investments, which have caused billions of won in losses. Rep. Jeon Hyun-heui, of the main opposition Democratic Party (DP), said during the annual parliamentary audit that the National Pension Service (NPS) is on the verge of losing some 17 billion won (US$15 million) because a company it invested in was delisted from the bourse. "The NPS injected around 17 billion won in Celrun Co. through a private equity fund but will lose all the money invested as the company was delisted," she said. "The NPS must have not been aware of the company's poor management in the first place or failed to deal with it properly afterwards." The financial regulator delisted Celrun, an electronic parts company, from the bourse in March this year, citing a capital shortage. In addition, Rep. Shin Sang-jin from the ruling Grand National Party (GNP) said that the NPS funneled public funds into ailing state-run corporations without considering the poor debt ratio of the companies, just because they were guaranteed by the government. The NPS has invested some 25.7 trillion won in bonds and stocks of 12 public corporations, which have a combined debt of 227 trillion won. Other legislators like the GNP's Rep. Park Soon-ja criticized the NPS for investing heavily in companies focused on alcohol, tobacco and gambling. "It is not right that the NPS invest money in businesses that can hurt public health and encourage gambling, just to make a profit," said Park. She said the NPS invested a total of 3.46 trillion won in companies engaged in such socially undesirable goods and services from 2005 to June 2010. Lawmakers also said NPS investments in overseas firms that engage in undesirable services jumped 10-fold to $356 million in 2010 from $35.7 in 2007. The NPS is South Korea's biggest investor and had an estimated 340 trillion won worth of assets under its management as of the end of April. It is known to invest primarily in the top 200 firms listed on the main bourse.