Samsung Urged to Improve Governance
By Yoon Ja-young
Staff Reporter
The nation's top economic policymaker Monday advised the Samsung Group to rectify its business practices involving the alleged creation of a slush fund.
Finance and Economy Minister Kwon O-kyu said that with the series of Samsung Group's corruption scandals shaking the nation's largest conglomerate, it should take this opportunity to change the way it conducts business.
Kwon said that Samsung and other companies have more room to improve their governance structure.
Commenting on allegations about Samsung's slush fund, Kwon said, ``There should be changes in business practices in line with improvements in regulations and the system. I believe there will be some changes in business paradigms.''
He said that Samsung Group should take the case as an opportunity to ``rectify its practices.''
Kwon evaluated how businesses improved after the Asian financial crisis on the occasion of the 10th anniversary of Korea's signing a contract with the IMF to seek bailout funds to save its troubled economy. He said Korea has made a giant step toward upgrading transparency, financial soundness and corporate responsibility in line with global standards.
``Companies have improved their financial soundness and profitability. Corporate responsibility and transparency, and accounting practices have been improved but these systems haven't been managed effectively,'' the minister said.
He added that Samsung and other top conglomerates should further upgrade their corporate governance to wipe out the recurrence of repeated slush fund scandals.
He added that the Samsung scandal will form a social consensus that legal barriers banning industrial conglomerates from controlling banks should be maintained.