By Park Si-soo
Korea’s major food companies are rushing to recruit newly retired officials from food and competition regulators in an attempt to keep their profitability intact amid tougher regulations to be imposed by the Park Geun-hye government.
President Park has pledged to thwart excessive expansion of major food companies to protect the livelihood of mom-and-pop stores, saying that the Fair Trade Commission (FTC), the National Tax Service (NTS) and the Korea Food and Drug Administration (KFDA) will assume a leading role.
In this context, the affected firms try to build connections with regulators to minimize any negative impact and one of the most efficient tools to use for network building is former officials. This is a typical form of influence-peddling practice that has been widely used in many other industries.
The nation’s biggest food company CJ Cheiljedang is the most aggressive in installing what critics call a “human shield.”
The company is seeking to appoint Choi Jung-pyo, a former non-standing commissioner at the FTC, and Kim Gap-soon, a former head of the Seoul Regional Tax Office, as outside directors during a general meeting of shareholders on March 22. Lee Ki-soo, a former president of Korea University and head of a Supreme Court panel tasked to draw sentencing guidelines on heinous crimes, will also be up for a seat during the meeting.
CJ Freshway, a food materials distributor, has decided to reappoint former KFDA commissioner Kim Myung-hyun as an outside director.
Lotte Confectionery will pick three new outside directors during a shareholders’ meeting next Friday. It’s widely believed that the seats are reserved for Park Cha-seok, a former commissioner of Daejeon Regional Tax Office; Kang Dae-hyung, a former vice commissioner of the FTC; and Park Jae-yeon, a senior advisor at the Federation of Korean Industries.
On the same day, Daesang Corporation is set to add two former bureaucrats, one from the FTC and the other from the KFDA, to its payroll. Namyang Dairy Products has decided to hire an NTS investigator-turned-tax accountant.
Sempio Foods Company will appoint Lee Hui-young, a former official at the Board of Audit and Inspection and presidential official during the Roh Moo-hyun administration, as an internal auditor.
Some analysts say former officials play a bridge role linking a company and the government and facilitating understanding of each other, while many are skeptical of the positive effect, taking them as a major culprit behind corruption.
President Park has made it clear that she will take zero-tolerance approach to corruption cases caused by “inappropriate” ties between businesspeople and bureaucrats.