Before Cracking Down on Business Lobby Groups

When public institutions issue press releases, they must cite reliable data. If anything feels questionable, they should track down whoever produced the data and clear up any doubts. The same standard applies when reporters write articles based on those releases or later conduct fact-checks.
People create issues, but they also create problems. Constantly verifying people is the foundation of communication. Yet during the so-called "KCCI fake news" controversy, none of the three parties involved—the Korea Chamber of Commerce and Industry (KCCI), the media, or the government—upheld that basic principle.
The disputed "fake news" refers to a KCCI press release and related news reports claiming that 2,400 high-net-worth individuals left Korea last year and that inheritance tax is accelerating the overseas exodus of wealthy people. When KCCI issued this material, it failed to properly verify the basis for the 2,400 figure.
That number originally came from New World Wealth, a South African wealth intelligence firm, which estimated it. Henley & Partners, a UK immigration consulting company, has cited this figure in its annual "Wealth Migration Report." Leading global media outlets, as well as Korean media, have reported on it for years.
Korean media once again relayed the contents of the report almost verbatim. Headlines like "Great Escape of the Super-Rich" and "Exodus from Korea Accelerates" treated the mass movement of the wealthy as an established fact. No one asked New World Wealth or other primary data providers a single question.
The government, which stepped in to fact-check, behaved no differently. On the 7th, President Lee Jae-myung criticized KCCI for spreading fake news about inheritance tax. In response, the Minister of Trade, Industry and Energy, the Minister of Finance and Economy, and the head of the National Tax Service convened business associations on short notice, publicly rebuked them, and issued explanatory materials. However, as evidence of fake news, they cited only critical coverage by British media and claims raised by civic groups. A government official said, "Given various circumstances, we raised an issue about whether this can really be trusted." KCCI had prepared its materials out of habit, based on the "circumstance" that it had cited the same statistics every year. The media felt safe following along because everyone else was doing so. And the government used those same "circumstances" as the basis for its criticism.
I emailed Henley & Partners and New World Wealth directly. Henley & Partners replied, "The figures are not designed to support claims about how many people moved because of a specific policy, but to serve as an indicator of trends." In other words, Henley does not view Korea's inheritance tax and the outflow of wealthy individuals as having a causal relationship. This confirms that the argument that inheritance tax is driving the wealthy out of the country was KCCI's own arbitrary interpretation.
New World Wealth then cited statistics on US investment immigration visas, corporate registry data, and data from international moving companies as the basis for estimating the movement of wealthy individuals. Some of these sources are somewhat far-fetched, but the investment immigration visa statistics are worth examining. Even now, it would be valuable to analyze those figures—which show strong Korean demand for investment immigration—and compare them with the actual movement of high-net-worth individuals.
The point is not to defend the "2,400" figure. For the scene of the trade minister scolding KCCI—where his former senior from the civil service exam now serves as vice chair—to be convincing, he should have pinpointed the core issue with indisputable facts and offered alternatives. Simply saying that the data are problematic because they come from a private firm, and that they have been "verified" because foreign media criticized them, is not fact-checking; it is merely reading the circumstances.
If we turn back the clock, what exactly should KCCI have done? And what should it do from now on to verify facts? One government official gave a textbook answer: "As the leading organization of the business community, it should have checked more thoroughly." Another said, "Ask KCCI." A KCCI official commented, "Given how grave the situation is right now, we are not separately carrying out any work to improve fact-checking."
Have both those tightening discipline under the president's rebuke and those being disciplined lost their grip on reality? There is no roadmap for how badly the facts have been contaminated or how to wash away the fake news. The minister's vow to hold people accountable and business lobby groups' pledge to make fact-checking mandatory are already evaporating into thin air.
syhong@fnnews.com Reporter