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‘Not a good time to be chaebol’

'Not a good time to be chaebol'

Investigations into personal wrongdoings of tycoons should not affect business

By Yoon Ja-young

The country’s leading conglomerates are facing unprecedented simultaneous bad events. On top of the current administration’s pressure to reform them, the tycoons of the top business groups are making headlines for personal problems such as embezzlement and divorce. Chaebol lobby groups which should defend them are also helplessly struggling for survival.

Most of all, the corruption scandal over ousted former President Park Geun-hye is still haunting the country’s top chaebol.

Samsung Electronics Vice Chairman Lee Jae-yong, for instance, is still going through hearings although he was released from jail this February after a year’s imprisonment, for his alleged involvement in the scandal.

However, he may be envied by Lotte Group Chairman Shin Dong-bin, who is still in jail after being sentenced to a two-and-a-half year jail term for allegedly bribing Choi Soon-sil, a long-time confidant of the ousted Park. He sought bail to attend a shareholders’ meeting in Japan, but the court de facto rejected it by delaying its decision.

KT Chairman Hwang Chang-gyu also made headlines as police asked the prosecution to seek warrants for him on suspicion that he created a slush fund for illegal donations to lawmakers, though the prosecution rejected this. Booyoung Group Chairman Lee Joong-keun, meanwhile, is on trial, on charges of a slush fund creation and embezzlement.

The chiefs of the country’s top full-service carriers are also going through the worst time in their lives. Hanjin Group Chairman Cho Yang-ho’s family members are being investigated for allegedly assaulting or abusing company employees and others. The prosecution sought an arrest warrant for Cho on allegations of embezzlement, which was rejected by a court Friday.

Kumho Asiana Group Chairman Park Sam-koo is having his own nightmare following a “meal fiasco” at the country’s second biggest carrier Asiana Airlines. He made a deep bow to apologize, but criticism is mounting following suspicion that he made the company switch to another meal supplier to secure extra cash to regain control of Kumho Tire.

Some chaebol are making headlines for personal affairs. SK Group Chairman Chey Tae-won, for instance, is going through a divorce from his wife Roh So-young, who is the daughter of former President Roh Tae-woo. He publicly confessed a couple of years ago that he had a child through an extramarital affair and that he wants to be with the new family.

DB Group had its former chairman Kim Jun-ki resign last September following allegations that he sexually harassed his secretary.

While chaebol owners may be blamed for those issues, workers at their businesses are also suffering from endless investigations. The prosecution has conducted 20 search-and-seizure operations on Samsung Group this year, which were mostly related to an investigation of former President Lee Myung-bak, and Samsung’s alleged sabotaging of a union. LG Group is being investigated over allegations of tax evasion by the owner family, which is unusual when considering the positive image it has built.

Hanjin was raided by the prosecution and customs service a number of times regarding the chairman family’s power abuse as well as illegal hiring of maids from the Philippines.

While tycoons should pay for their wrongdoings, those working at the business groups are complaining that the endless search-and-seizure operations are hampering their work. Analysts say the personal faults of the owners should not affect the business.

“For instance, it was Hanjin Group chairman’s daughter who threw water in the face of an employee, not Korean Air, the company,” said Yoon Chang-hyun, a professor of business administration at the University of Seoul.

He said that one should distinguish personal irregularities of tycoons from the performance of the company.

“Those businesses are the workplaces for numerous employees. Unless we stress that it is the individual chaebol family members that are being investigated, all employees will feel intimidated, not to mention the negative impact on corporate investment,” he said, calling for a more cautious approach that would not hurt workers, investment or jobs.

Chaebol lobby groups which should defend the conglomerates, meanwhile, are not playing their role as they are struggling with their own problems, except for the Korea Chamber of Commerce and Industry. The Federation of Korean Industries has nearly collapsed due to its involvement in former President Park’s scandal, and the Korea Employers Federation is in disarray following an internal feud.

From http://www.koreatimes.co.kr

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