The national pension fund’s move to exercise its shareholder rights to a greater extent could become a double-edged sword. On one hand, it could help the fund better manage its investment, but on the other hand it could lead to political interference in the management of private companies.

It is against this backdrop that the National Pension Service should be prudent in its plans to exercise its shareholder rights with regards to Korean Air, which is being pounded by a barrage of scandals.

The plans, announced by Health and Welfare Minister Park Neung-hoo last week, call for the NPS, which is the second-largest shareholder in Korean Air, with a 12.45 percent stake, to publicly express concerns, send an open letter to the management and demand a meeting with the top management. Officials indicated that they could demand the sacking of executives responsible for the cases being investigated.

It is the first time that the nation’s largest institutional investor has decided to take such action. Its previous activities as a major stakeholder have been limited to exercising voting rights and delivering its views on dividend payouts.

Minister Park, who concurrently heads the NPS’ fund management committee, said that the decision was made to protect the assets of the people and enhance long-term profitability of the retirement fund.

It makes good sense that the fund should discharge its responsibilities as a major stakeholder and as the operator of a financial lifeline for pensioners. It is natural for the fund to be wary of the impact of the scandals damaging the reputation of the national flag carrier and its stock values alongside.

Indeed, all of the family members closest to Korean Air Chairman Cho Yang-ho – his wife and three children – are embroiled in cases ranging from abusing and mistreating employees and smuggling to hiding assets overseas and even an illegal college admission and hiring maids who were working in Korea on the wrong visa.

They deserve punishment, if they are found guilty. There is no doubt as a major stakeholder of the company, the NPS should try to minimize losses from the Korean Air stocks under its possession.

But the problem is that the NPS’ pending actions against Korean Air seems politically motivated. It may well be aligned with the Moon administration’s effort to use the shareholders’ rights issue to tame and rein in conglomerates, including family-controlled chaebol like Korean Air.

It would be no coincidence that Minister Park, not a lower-ranking official of the ministry or the NPS -- came forward over the Korean Air case and that the announcement came ahead of the adoption of the “stewardship code” next month.

The stewardship code, one of President Moon’s election promises, refers to a set of principles that institutional investors are expected to actively engage in corporate governance in the interests of their beneficiaries -- i.e. shareholders. The guidelines would pave the way for institutional investors to intervene in determining the level of dividend payouts and appointment of outside directors.

Given that the NPS and other institutional investors could be put under government influence easily, the adoption of the stewardship code raises concerns that it could be exploited by the government -- like the authority of agencies like the state prosecution, tax service and antitrust watchdog -- to tame and punish businesses.

The NPS, the world’s third-largest pension fund, has 131.5 trillion won ($122 billion) invested in local stocks, and it has stakes of 5 percent or more at 276 major companies. Think about how much influence it can exert on them.

We remember a recent case in which the NPS was coerced into supporting the merger in 2015 of two affiliates of Samsung Group, which raised suspicions that political power was involved in the merger critics said was pushed to facilitate the succession process within the group’s controlling family.

The case shows that expansion of the NPS’ shareholder rights is prone to abuse and misuse by the government. Shareholder rights ought to be protected and enhanced, but not at the expense of the principle of market economy and the independence of the retirement fund. The NPS should be the last institution to walk a political line.