[Edaily Marketin Reporter JI YEONG-EUI ] A former high-ranking official of the National Pension Service (NPS), who moved to a position as head of Koramco Asset Management’s Jeonju office earlier this year, has come under scrutiny in the investment banking (IB) industry regarding the appropriateness of using “NPS” (the English acronym for the National Pension Service) in his company email address.

Since this executive’s move coincided with the National Pension Service’s push to replace the general partner (GP) for the Yeoksam Centerfield project—and given that the head of the NPS Real Estate Investment Division, who led the GP replacement effort, was recently placed on administrative leave—there are calls in the market to scrutinize the adequacy of conflict-of-interest management.

According to the investment banking industry on the 19th, the National Pension Service placed the head of its Real Estate Investment Division on administrative leave on the 16th. Although the National Pension Service did not disclose specific reasons, industry observers believe the process of replacing the GP for the Yeoksam Centerfield project—which was spearheaded by the Real Estate Investment Division—is not unrelated to this personnel decision.

Centerfield is a prime office building in Seoul’s Gangnam district in which the National Pension Service invested after selecting Aegis Asset Management as the GP. The NPS Real Estate Investment Division had pushed to replace the asset’s GP with Koramco Asset Management, but the plan was blocked by the Alternative Investment Committee, the final decision-making body. It is understood that the procedures and appropriateness of the replacement process were the main points of contention.

The market is focusing on the timing of the departure of Mr. A, the former head of the Investment Support Division at the NPS Fund Management Headquarters, who was recruited as the head of Coramco Asset Management’s Jeonju office. Coramco Asset Management opened its Jeonju office early this year and appointed Mr. A as its head. Since the NPS Fund Management Headquarters is located in Jeonju, North Jeolla Province, some asset management firms operate their Jeonju offices as hubs for business communication and networking with the NPS.

Mr. A’s move coincided with the period when the National Pension Service was considering replacing Centerfield’s general partner (GP). According to industry sources, the National Pension Service had been pushing for a change in Centerfield’s GP since late last year, and Mr. A joined Koramco Asset Management early this year. Subsequently, in April, Koramco Asset Management was selected as the preferred bidder for Centerfield’s new GP.

Another point drawing attention in the industry is the corporate email address used by Director A. While using a Koramco Asset Management corporate email account, Director A included “NPS”—the English acronym for the National Pension Service—in his username and listed it on his business card as well.

Some market observers have expressed the view that an email ID reminiscent of a background at a public institution could lead to misunderstandings externally. Given that the National Pension Service is South Korea’s largest institutional investor (LP), there are also concerns regarding whether it is appropriate for a private asset management firm to use such terminology.

In response, Koramco Asset Management explained, “The email ID was set up simply to make it easy for the individual to identify themselves; it was not intended to indicate any official affiliation with the National Pension Service.”

It is not illegal for former executives or employees of public institutions to move to private financial firms. However, some in the industry point out that, given the National Pension Service’s status as the country’s largest institutional investor, the timing of such moves—occurring during periods when major investment decisions are being made—could raise concerns about potential conflicts of interest.

One market official said, “If you imagine a former Financial Supervisory Service (FSS) official moving to a private financial firm and including ‘FSS’ in their business card email address, or a former Financial Services Commission (FSC) official including ‘FSC,’ you can understand why this issue is sensitive.”

Another official pointed out, “It is not enough to simply explain that there are no legal issues,” adding, “Since the National Pension Service manages the retirement funds of the public, it must more strictly manage situations that could even appear to be conflicts of interest.”