Chong Kun Dang chief under fire for misconduct
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Chong Kun Dang Pharmaceutical Chairman Lee Jang-han bows in apology for verbally abusing his personal drivers, at the company headquarters in Seoul, Friday. The company stock has been hit hard by the owner’s misconduct since the scandal broke Thursday. / Korea Times photo by Shim Hyun-chul
By Lee Hyo-sik
Shares of Chong Kun Dang Pharmaceutical and other affiliates have been battered by the escalating scandal implicating its chairman’s verbal abuse of his personal drivers over the years.
Analysts say the misconduct by Chairman Lee Jang-han will tarnish the image of one of Korea’s largest pharmaceutical companies and adversely affect its sales.
In order to contain the growing public anger, Lee issued an apology Friday at an abruptly held press conference at the company headquarters in Seoul.
“I seek forgiveness from those hurt by my behavior,” Lee said. “I am deeply sorry for what I did and will humbly accept all responsibility. I will take time off for self-reflection.”
However, the chairman did not say whether or not he would resign from his post. After reading aloud the written apology, he hurriedly left the scene without taking questions from journalists.
On Thursday, the nation was gripped again by another story of the powerful abusing the weak.
Some of Lee’s previous drivers made public voice recordings of him verbally assaulting them. In the recordings, the chairman insulted drivers by calling them stupid and making personal attacks on their family members.
Over the past year, three drivers have quit because of Lee’s verbal abuse, according to Chong Kun Dang officials.
“The chairman admitted to having verbally abused some drivers, but he did not physically assault any of them,” one official said. “Lee has been trying to contact the victims to personally apologize to them but he hasn’t been able to make contact.”
Hit hard by the growing controversy, shares of Chong Kun Dang Pharmaceutical fell 3.36 percent, or 4,000 won, to 115,000 won per share Friday, while those of Chong Kun Dang Holdings dropped 2.58 percent, or 1,800 won, to 68,000 won.
The stocks will likely continue to remain weak for the time being as investors are concerned the scandal may adversely affect its sales.
“The latest Chong Kun Dang controversy will certainly tarnish its corporate image and negatively affect its business,” said an executive at one of Korea’s major business associations, who declined to be named.
“As seen in the cases of Mr. Pizza and Hosigi Chicken, consumers are sensitive to issues of corporate ethics and many consider company reputations when making purchases,” the executive said. “Even though the pharmaceutical firm is largely in business-to-business dealings, its sales will be negatively affected by the owner’s ill behavior.”
Mr. Pizza’s ex-Chairman Jung Woo-hyun has been charged with embezzlement, malpractice, unfair trade and mistreatment of franchisees. He also stirred public ire following a confrontation with a building security guard. Hosigi Chicken Chairman Choi Ho-sig is under investigation for allegedly sexually harassing a female employee.
Lee is the eldest son of Chong Kun Dang founder Lee Chong-kun, who died in 1993. Lee holds significant stakes in Chong Kun Dang, Chong Kun Dang Holdings and Chong Kun Dang Bio, valued at about 192 billion won. He is also vice chairman of the Federation of Korean Industries and the Korea Employers Federation.
In 2016, Chong Kun Dang made 832 billion won in sales.