Park Jae-hyuk is a seasoned journalist who has provided comprehensive coverage of South Korea's corporate dynamics, economic policies, industry challenges and the global positioning of Korean companies. Based on the articles he has written since joining The Korea Times in 2016, his investigative approach has helped readers understand corporate governance, economic trends and business strategies shaping South Korea’s economy.
Reporter's Notebook Macquarie can learn lessons from Mirae Asset, Hahn & Co.
Macquarie Group headquarters in Sydney / Yonhap
By Park Jae-hyuk
By Park Jae-hyuk
Macquarie has a chance to learn lessons from Mirae Asset and Hahn & Company in terms of managing disputes with civic groups in the regions where they made investments.
The Australian asset manager is facing severe backlash at this moment from civic groups in Gwangju for its recent attempt to acquire the city's gas supplier Haeyang Energy from Glenwood Private Equity.
Nine groups in the region, including the Korean Confederation of Trade Unions (KCTU), the Citizens' Coalition for Economic Justice and the Justice Party, joined hands with an intention to prevent a price hike for consumers after Macquarie's takeover.
“If Macquarie acquires Haeyang Energy, it is highly probable that it will repeat what it has done when managing the Gwangju Second Beltway,” the groups said in a statement. “Citing the large-scale investment, it will borrow money at a high interest rate and will justify a rate hike.”
A spokeswoman of Macquarie's Korean office declined to comment on this issue. A representative from one of the regional civic groups said there was no conversation with the foreign asset management firm.
If Macquarie finalizes its takeover without resolving the dispute, the company will continue to face backlash from the civic groups, raising concerns about potential risks.
Mirae Asset and Hahn & Co., both of which recently found clues to settle severe disputes with civic groups in the regions where they made investments, therefore can be good guides for Macquarie.
In May, Mirae Asset halted its project to build accommodations in Yeosu, South Jeolla Province, due to negative public sentiment in the region.
However, the financial firm began to communicate recently with regional civic groups to let them know the necessity of the facility and dispel worries about speculation.
Given that South Jeolla Province Governor Kim Yung-rok and local residents want the construction, Mirae Asset is expected to resume the project once it resolves the dispute through communication.
Hahn & Co.'s portfolio company Ssangyong C&E is trying to convince residents in Jecheon, North Chungcheong Province, who have protested the construction of a landfill in neighboring Yeongwol County, Gangwon Province.
Although an activist in Jecheon spread negative rumors about the private equity firm and went on a hunger strike, he eventually stopped his protest and apologized for spreading rumors last week, after the cement company promised to come up with measures to communicate with residents in Jecheon and Danyang, North Chungcheong Province, in addition to those in Yeongwol.
Both Mirae Asset and Hahn & Co. proved that communication is the best way to resolve conflicts.
Macquarie should also start a conversation with regional civic groups, immediately after its acquisition is finalized.