Corporate watchdog chief hopes for conglomerates' voluntary change

Published : May 10, 2018 - 14:03 Updated : May 10, 2018 - 14:03

South Korea's corporate watchdog chief said Thursday that conglomerates should continue efforts to voluntarily reform their cobweb-like family-run governance structures to meet market expectations and promote fair competition.

In a meeting with heads of the country's top 10 conglomerates, including Samsung and Hyundai, Fair Trade Commission Chairman Kim Sang-jo also stressed that the corporate watchdog would keep monitoring large business groups who abuse their market dominance and carry out unfair business practices.

Fair Trade Commission Chairman Kim Sang-jo (center) speaks during a meeting with heads of the country`s top 10 business groups in Seoul on May 10, 2018. (Yonhap)

"Conglomerates have been implementing plans to improve ownership structure, and that is very positive in that their moves meet market expectations as well as demand from our society," Kim said during the meeting, the third of its kind since his inauguration in May 2017.

"I hope their efforts continue to move forward," Kim said.

Samsung Electronics Vice Chairman Yoon Boo-keun, Hyundai Motor President Chung Jin-haeng, and a slew of top-level management officials from Lotte, SK and Doosan attended the meeting.

Family-controlled business groups, widely known as chaebol here, have been under pressure to change their ownership structures and how they do business.

In March this year, a number of large conglomerates, such as Hyundai Motor Group, unveiled plans to streamline their circular cross-shareholding structure through business spinoffs and mergers among affiliates amid growing pressure to make changes.

"Applying strict rules or being coercive is not the best option to bring about change. Rather, it could be more effective (for conglomerates) to voluntarily change the way they do business," Kim said.

Regarding Samsung Group's case, Kim said it is not an issue that the government can force the group to resolve. "But what is clear is that the current system does not guarantee Samsung's sustainability," Kim said. (Yonhap)