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| The Federation of Korean Industries headquarters building in Seoul / Yonhap |
SK, Hyundai Motor, LG follow suit
By Park Jae-hyuk
Korea's four largest business groups have decided to rejoin the Federation of Korean Industries (FKI), according to industry officials, Monday.
The FKI, funded by membership fees paid by Korea's largest conglomerates and other companies, used to serve as the combined voice of businesses, asking the government for changes and support. But Samsung and other major conglomerates withdrew their memberships six years ago after then President Park Geun-hye, who was eventually impeached, was found to have used the business lobby group to collect bribes from big businesses.
Since then, the Korea Chamber of Commerce and Industry (KCCI) has served as the combined voice of big businesses. But in recent years, the FKI has sought to shake off the stigma by appointing a new leader and embracing other reforms.
The conglomerates, meanwhile, could avoid criticism for rejoining the FKI due to a technicality.
Samsung and the other conglomerates retained their memberships in Korea Economic Research Institute (KERI), an economic think tank run by the FKI. Samsung Electronics' board of directors agreed to let the FKI take over the membership of KERI after the business lobby group merges with the think tank, Tuesday.
"Samsung Electronics held a board meeting after the Samsung Compliance Committee recommended its five affiliates on Friday morning to rejoin the FKI," an industry official said on condition of anonymity. "An approval from the board members is unnecessary for the company's return to the FKI, but regarding its funding for the federation, the company needs to get an approval."
Samsung SDI, Samsung Life Insurance and Samsung Fire & Marine Insurance are said to have held board meetings to make the same decision. But Samsung Securities reportedly decided not to rejoin the FKI.
SK Group's affiliates ― SK Inc., SK Innovation, SK Telecom and SK Networks ― also finished discussing the matter at each of their board meetings, according to sources familiar with the matter.
The affiliates of Hyundai Motor Group ― Hyundai Motor, Kia, Hyundai E&C, Hyundai Mobis and Hyundai Steel ― and those of LG Group ― LG Corp. and LG Electronics ― reportedly completed necessary procedures to rejoin the FKI.
SK, Hyundai Motor and LG groups are also expected to rejoin the FKI by allowing it to take over the membership in KERI after the planned merger.
The FKI plans to approve its merger with KERI at a general meeting, Tuesday, while appointing Poongsan Group Chairman Ryu Jin as the new chief. The business lobby group will also change its name.
After the meeting, the new FKI chairman is expected to mention the return of the top four business groups to the federation.
Samsung's four affiliates reportedly decided to pay their membership fees to the FKI, while it remains uncertain whether the affiliates of the three other business groups will follow suit.
Their decisions, however, are facing strong protests from progressive civic groups.
"Samsung's board of directors appears to have used a deceptive method to avoid its responsibility for the company's return to the FKI," the Solidarity for Economic Reform said in a statement. "After the inauguration of President Yoon Suk Yeol, the possibility has been growing of corrupt relations between business and political circles."
The Citizens' Coalition for Economic Justice criticized the Samsung Compliance Committee for supporting the FKI, despite the committee's duty to eradicate the conglomerate's collusion with political circles.
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