A former official at the Ministry of Economy and Finance claimed that President Moon Jae-in’s office forced the issuance of deficit-covering bonds worth 4 trillion won late last year despite opposition from the ministry.

Shin Jae-min, 32, alleged that the move was a political attempt to make the Park Geun-hye administration look bad by increasing government debts for the year 2017. Moon took office in May last year. 

Shin also claimed that Cheong Wa Dae had attempted to replace the CEO of KT&G, and had ordered the replacement of Seoul Shinmun’s president.

Deficit-covering bonds are issued when the government’s tax spending exceeds tax revenues, adding to the national debt. Last year’s tax revenues were expected to exceed tax spending at the time.

In addition to two YouTube videos that he uploaded over the weekend, Shin wrote about “why I left the Ministry of Economy and Finance” in a post on the online student message board of his alma mater, Korea University, Sunday.

In the post, Shin said he was instructed to write a report on Nov. 13, 2017, on how to issue additional deficit-covering bonds “under the political judgment” of then finance minister Kim Dong-yeon.

Shin said the reason behind the ministry’s decision to cancel a planned purchase of government bonds in December 2017, also carried out under Kim’s orders, was to allow room for the issuance of additional deficit-covering bonds.

The cancellation, a day before the planned purchase, led to market confusion, Shin said.

On Monday, Second Vice Economy and Finance Minister Koo Yoon-cheol said in a press briefing that the ministry will consider taking legal action in response to Shin’s claims.

Moon’s top press secretary denied Shin’s claim that the presidential office ordered the replacement of a Seoul Shinmun president.

“I heard with my own ears that among Cheong Wa Dae’s orders, the CEO replacement at KT&G didn’t work out, but that the Seoul Shinmun case must proceed,” Shin said in the video.

Yoon Young-chan, the top press secretary to Moon, said in a message sent to reporters on Monday: “The former president of Seoul Shinmun stayed in office two more months after his term expired as the process to appoint his successor was delayed. … Had (the presidential office) attempted to replace the president, your colleagues at Seoul Shinmun would know about it.”

With a 33.86 percent stake in Seoul Shinmun as of September, the ministry is the newspaper’s largest shareholder.

Seoul Shinmun explained that as its former president’s term expired in March, a committee consisting of the newspaper company’s shareholders was formed to recommend candidates and the ministry “underwent legal procedures to exercise its rights as a shareholder.”

“Please note that the ministry is the largest shareholder of Seoul Shinmun. … It is hard not to question the credibility of that person’s (Shin’s) remarks,” Yoon said.

By Kim So-hyun (sophie@heraldcorp.com)