Samsung expected to rejoin FKI with strings attached

Lee Chan-hee, center, head of Samsung's compliance committee, answers questions from reporters before attending a meeting to discuss Samsung affiliates rejoining the Federation of Korean Industries (FKI), at Samsung Life Insurance's headquarters in Seoul, Friday. Yonhap

SK, Hyundai Motor, LG likely to follow suit soon

By Baek Byung-yeul

Samsung Group is expected to rejoin the Federation of Korean Industries (FKI) next Tuesday as its compliance committee recommended five affiliates to become members of the business lobby group once again.

But the affiliates have been instructed to immediately withdraw from the federation if it colludes with political circles, according to the committee, Friday. SK, Hyundai and LG will likely follow suit in the near future.

The committee held a meeting earlier in the day to discuss a request by the FKI for Samsung Electronics, Samsung SDI, Samsung Life, Samsung Fire & Marine Insurance and Samsung Securities to rejoin the lobby group. The FKI is attempting to reform the organization and refresh its reputation which was tainted by involvement in a bribery scandal involving impeached former President Park Geun-hye in 2016. Due to the criticism, the lobby group lost its major member conglomerates including Samsung, SK, LG and Hyundai Motor Group.

Samsung's compliance committee had initially held a meeting on Wednesday to discuss the return of Samsung affiliates but was unable to reach a conclusion and had another meeting on Friday. After the two meetings, the committee recommended that if the Samsung affiliates companies rejoin the FKI, they should immediately withdraw from the organization if the FKI's cronyism continues.

The committee also recommended that Samsung's affiliates conduct thorough internal reviews of due process to ensure transparency in the FKI's operations and accounting, before deciding to return.

“We made a clear recommendation that there should never be any political intervention under any pretext regarding the FKI's human resources affairs and operations,” Lee Chan-hee, head of the compliance committee, told reporters after the meeting.

“We believe that one of the most important things that can break the cycle of cronyism between the political circle and business circles is strong compliance oversight, and we are confident that at least under compliance controls and oversight, interventions will not be as easy as they have been in the past,” Lee added.

The decision to rejoin the FKI is now in the hands of Samsung Group affiliates. Samsung will hold a board meeting to make a final decision on whether to rejoin.

It was reported that the five Samsung affiliates will hold a board meeting on Aug. 21 to decide on the issue, but a Samsung Electronics spokesman said “no board meeting has been scheduled yet.”

If Samsung, the largest conglomerate here, decides to rejoin the FKI, it is expected that SK, LG and Hyundai Motor, which left the FKI, would also rejoin.

The FKI will hold a general meeting on Aug. 22 to rebrand its organization, nominate Ryu Jin, chairman of Poongsan Group, as its new chairman and accept new members.