By Yoon Ja-young
The head of the country’s antitrust agency said that he plans to meet representatives from the country’s top four conglomerates within this week.
“President Moon Jae-in has stressed that corporate reform should be done in a very cautious, rational and sustainable manner, and I totally agreed with him. For this, thorough discussions and communication with stakeholders is essential,” Fair Trade Commission (FTC) Chairman Kim Sang-jo said Monday.
“During the presidential election, the President said that he will concentrate on the top four conglomerates and I also said that, which triggered them to be concerned. It prompted me to think that I should enhance their understanding, getting rid of uncertainties and helping them decide on policy directions.”
He said that he requested the Korea Chamber of Commerce and Industry (KCCI) to organize the meetings. However, it hasn’t been decided whether it will be chaebol chairmen or other executives who will attend the meeting.
“I already said that the government will not reform the chaebol in a forceful way. However, I will also tell the conglomerates that the government anticipates them to meet the expectations of society and the market. I will try to listen to their opinions and continue discussions regarding the specific situations of each of them.”
A meeting between businesses and the President will follow, but he stressed this won’t be a secretive one as in the former President Park Geun-hye administration which led to bribery charges against her and Park’s impeachment.
Nicknamed “chaebol sniper,” the former economics professor has dedicated himself to social movements to reform conglomerates that dominate the country’s economy and the market. His appointment to head the antitrust regulator has led to much expectation that there will be a strong drive for reform.
He has been taking a low key recently, but stressed that the government won’t sit idle.
“Conglomerates are valuable assets for the Korean economy. Those who make efforts will be highly evaluated by the government. For those who continue with wrongdoings, however, I would like to make it clear that the government including the FTC will take appropriate measures. The meeting aims at giving a strong message that we expect them to change in a way that meets the expectations of society and the market.”
He also said that the FTC is looking into internal trading within conglomerates. The country’s chaebol owner families have been using internal trading between subsidiaries to fatten their wallets, at the expense of other shareholders. The FTC received documents submitted by 45 conglomerates regarding internal trading last March, and has been examining them.
“Investigation will start if serious problems are found, regardless of the size of the conglomerate. We are also examining power abuse by conglomerates against subcontractors or by franchises on franchisees.”
Regarding the recent controversy over fried chicken franchises, however, Kim said the FTC doesn’t restrict pricing by each business. After major fried chicken franchises announced raising prices, the FTC started to examine whether the headquarters levied undue fees on franchise shops.
“Unless they abused their monopolistic power or were engaged in price rigging, the FTC has no right to intervene. The FTC is not an inflation controlling body.”