Chaebol urged to reform on their own
FTC chairman meets with top four chaebol leaders
By Yoon Ja-young
The chief of the country’s antitrust regulator urged conglomerates to start self-reform.
“Large business groups including Samsung, Hyundai Motor, SK and LG groups prove the amazing success achieved by the Korean economy. They will continue to be valuable assets of the economy,” Fair Trade Commission Chairman (FTC) Kim Sang-jo said while meeting representatives of the country’s top four conglomerates Friday.
“However, the managerial strategies and decision-making processes of the conglomerates somewhat falls short of the expectations of society and the market, despite the rapidly changing economic environment.”
The FTC chief had suggested early this week that the Korea Chamber of Commerce and Industry organize a meeting with the country’s top four conglomerates, their first meeting with the FTC chief since 2004.
At the meeting were Samsung Electronics Vice Chairman Kwon Oh-hyun, Hyundai Motor President Chung Jin-haeng, SK Telecom CEO Park Jung-ho, and LG President Ha Hyun-hoi, each representing the top four conglomerates.
He pointed out the livelihoods of the people have become harsher while top conglomerates grew into global players.
“I am not saying businesses are to blame for this. However, there must be something that businesses should look back on,” he said.
Nicknamed the “chaebol sniper” for his dedication to reforming the country’s conglomerates, the former economics professor is a symbolic figure of the Moon Jae-in administration which has included chaebol reform on its agenda. Irregular transfer of managerial control within owner families, unfair practices against subcontractors and circular investment among subsidiaries are among their deep-rooted irregular practices.
The FTC has been examining internal trading of 45 conglomerates, and the FTC chief has said companies where irregularities are found will be investigated. The FTC is also scheduled to reopen the bureau in charge of conglomerate investigations which was closed down 12 years ago due to resistance by conglomerates.
Kim, however, has been stressing recently that chaebol reforms will be rational and gradual. He also said the government wants chaebol to change on their own, through voluntary decision-making. While expecting conglomerates to change themselves to meet the expectations of society and the market, he also warned the FTC as well as the whole administration will have to take measures if they continue with wrongdoings.
“I am here to explain the policies of the FTC as well as policy directions of the new government, to ask conglomerates to take pre-emptive efforts for changes and set a good example,” he said.
“Please do not hesitate to give your opinion on government policies. We are ready to listen, discuss and provide support.”
Kim said he will patiently wait for voluntary changes in businesses, but added there is not much time and the window for making changes should never be missed again.