As of the end of 2015, 74 public agencies held shares in 560 corporations not designated as public institutions, with that equity worth KRW 41.7856 trillion. Under these circumstances, now is the time to examine whether the public agencies face any systematic issues in managing these corporations and they have achieved any results from their management.

To this end, this report analyzes the management systems, particularly the prior consultation system, business disclosures, and business assessments, at those corporations established since the announcement of a massive restructuring of public sector-financed corporations in 2009. In addition, the largest of these corporations are evaluated by applicable phase: establishment, operation, and liquidation. 

According to the findings, mandatory prior consultation is skipped in the establishment phase, business disclosures and business assessments are loosely managed, hiring of retired civil servants is insufficiently regulated, and business performance is poorly monitored. In addition, analysis reveals a variety of issues, including incomplete pre-feasibility studies and entrance into non-vital sectors of parent companies in the establishment phase, poor business performance and capital encroachment in the operation phase, and business liquidations due to poor analysis of overseas markets. 

The government therefore needs to better ensure the effectiveness of the prior consultation system in the establishment phase, and introduce routine schemes for inspection of functions and evaluation of viability in the operation phase. Moreover, the performance of those that make inroads into overseas markets should be examined. A close review is needed of those corporations with work outsourced by public agencies to determine if their work scope is clear and if they are measured against the private sector in terms of competitiveness. When corporations are founded through leveraging of private sector capital and technologies, a detailed feasibility check is also essential.