Hyundai sets pace in corporate giving

By Yoon Ja-young

Hyundai Motor Group Chairman Chung Mong-koo is leading the way for corporate donations, after deciding to donate 500 billion won, the largest amount by an individual.

Chairman Chung Mong-koo’s bold decision is taken as an answer to criticism big businesses are facing for being unwilling to share with the rest of society.

President Lee Myung-bak has specifically called on chaebol, family-oriented conglomerates, to be more forthcoming to his call for a “fair society” where people irrespective of their wealth or social standing are given a fair chance to succeed.

Hyundai’s move is seen as heeding this presidential call that resonates throughout society.

The chairman will give the Haevich Social Contribution Culture Foundation 500 billion won worth shares of Hyundai Glovis, a logistics arm of the group. The donation will pull down his stake in the firm by 7.02 percentage points to 11.09 percent. His son Chung Eui-sun, the vice chairman, holds 31.88 percent and Hyundai Motors, 4.88 percent in Hyundai Glovis.

It marks the biggest donation by a single person ever in the country’s history, but Chung has already donated shares to the foundation several times. He gave the foundation 60 billion won worth of stocks in November 2007, 30 billion won the next year and 60 billion won in 2009 December. Including this donation, he has handed over 650 billion won worth of Glovis shares so far.

Chaebol account for a large portion of the country’s economy, but have been criticized for being stingy in giving back to society. Recently, they have been changing slowly, and family members of the late former Hyundai Group chairman and founder Chung Ju-yung have been leading the move.

Rep. Chung Mong-joon of the governing Grand National Party, the biggest shareholder of Hyundai Heavy Industries, recently announced he would donate 200 billion won to set up the Asan Sharing Foundation. The lawmaker is the younger brother of the Hyundai Motor Group Chairman Chung. The series of donations by family members of former Hyundai Group founder Chung Ju-yung shows that they are inheriting the late Chung’s exemplary and exceptional contribution to society.

“Asan Chung Ju-yung set up the Asan Social Welfare Foundation in 1977 when few people had heard of welfare, and set up hospitals and gave scholarships to students in need,” said Chung Chin-hong, a professor emeritus at Seoul National University, who heads the committee to set up the Asan Sharing Foundation.

The donation by Hyundai Motor Group Chairman Chung is also notable in that it comes from his pure willingness to share with society. Conglomerates made donations or set up foundations several times in the past, but it was often a token gesture to seek a pardon from society after being involved in a corruption scandal.

As society is maturing, more entrepreneurs here came to take super rich donators overseas as examples to follow. The donation comes amid a widening social gap in the society.

“Chairman Chung decided to fund 500 billion won to contribute to the nurturing of future leaders, providing education opportunities to children of low-income households,” Hyundai Motor Group announced in a statement.

Soaring college tuition fees have burdened students from low income families, with some of them falling into credit delinquency after failing to pay back loans.

“We will continue programs to help children of underprivileged neighborhoods nurture their hopes, to keep the dynamic mobility between classes, the strength of our society,” a representative for the Haevich Social Contribution Culture Foundation said.

There have been concerns that the gap between conglomerates and small companies is also nearing a dangerous level. The President Lee Myung-bak administration has been pressuring conglomerates to share the fruits of their growth with other members of the economy. The conglomerates have faced criticism that they are taking business opportunities from small merchants, advancing into any business category that seems profitable.