LG Group announces withdrawal of membership from FKI

LG Group on Tuesday announced its withdrawal of membership from the Federation of Korean Industries (FKI), becoming one of the first major conglomerates to do so following the influence peddling scandal involving President Park Geun-hye and her close friend Choi Soon-sil.

The announcement came after the FKI, the country's largest business lobby with the membership of the country's top 600 firms, came under wide public criticism for its role in what is believed to be an illicit and coercive fundraising for two sports foundations -- Mir and K-Sport -- allegedly proposed and controlled by Choi.

"The group has decided to withdraw its FKI membership as of the end of this year and has delivered its decision to the FKI," a group official said.

The announcement came one day after the country's largest conglomerate Samsung Group reaffirmed its decision to quit the organization, saying it will not be paying FKI membership fees anymore.

The two, along with other key members of the FKI, including Hanwha and SK, had been urged to quit the business lobby during a parliamentary hearing that involved the heads of the country's eight largest business groups.

The business groups themselves are suspected of corruption by providing a combined total of nearly 80 billion won ($66.4 million) to the two sports foundations ahead of presidential pardons for their imprisoned chiefs.

Many believe the FKI may very well be dissolved following the departure of Samsung and LG, and many others are expected to follow suit.

Earlier reports have noted Samsung alone accounts for 25 percent of FKI's annual budget of some 40 billion won, while the top 10 business groups, including Samsung, provide about 20 billion won or half of FKI's annual membership income. (Yonhap)