The American Chamber of Commerce in Korea expressed its discomfort over the recent detention of Lee Jae-yong, the chief of the country’s top conglomerate, Samsung Group.
While respecting the court’s decision to put Lee behind bars for bribery, the business association cited the case as an example of a “Korea-unique” business hurdle for global business entities here.
“Samsung is an important company with significant global leadership, which was why we were sad to hear the news,” said James Kim, chairman and CEO of AMCHAM Korea, in an online press conference.
“But we do understand that the rule of law in Korea should be abided by.”
The Seoul High Court on Monday handed down a jail sentence of 2 1/2 years for Samsung Electronics Vice Chairman Lee for bribery and embezzlement in a case involving the former president and her confidant. Lee was immediately put under court detention and returned to the Seoul Detention Center, which he had left in February 2018.
While accepting the court ruling, the AMCHAM top official pointed out that the strict level of CEO responsibility in Korea tends to act as a business obstacle, especially for foreign businesses.
“The extent of CEO risks in Korea, as shown in Lee’s case, is actually quite unique in the global sense,” he said.
CEOs operating in Korea, according to AMCHAM, face a higher level of risk than those in peer economies and thus need to obtain a deeper understanding of the law and of their workers’ culture.
Aware of such challenges, AMCHAM is set to hold a webinar for its members this week on the subject of CEO risks, Kim added.
As for the business outlook of Samsung Group, AMCHAM Board of Governors Chairman Jeffrey Jones remained optimistic as he drew a line between leadership risk and business management.
“Of course, one cannot exclude Lee’s influence (to the group), but Samsung Group as a global business operator will go its way, without taking that much impact (from Lee’s imprisonment),” he said.
In light of the imminent inauguration of US President-elect Joe Biden, AMCHAM vowed to play a bridging role between Seoul and Washington as the new US government settles in.
“There is significant alignment between the agendas of the Biden and Moon administrations, including the Digital and Green New Deals,” Kim said.
“As he reaffirmed during his visit to AMCHAM in 2013, President-elect Biden is a strong supporter of the US-Korea alliance, and AMCHAM will encourage the Biden administration to enhance the US’ commitment to the alliance.”
Also, as the global and regional markets anticipate realignment in the wake of the COVID-19 pandemic, Asia’s fourth-largest economy should seize the opportunity to rise as a new regional business hub, AMCHAM added.
“We will collaborate with the Korean government to establish Korea as the top destination for global companies’ regional headquarters in Asia,” said Kim.
“AMCHAM is currently conducting analysis on the key priorities and recommendations for Korea to elevate itself above regional competitors, including China, Japan and Singapore.”
The required actions, according to AMCHAM, include the lowering of corporate tax rates, boosting labor flexibility, enhancing the protection of intellectual property, and alleviating the compliance costs. The so-called “Korea-unique” trade barriers, too, should be adjusted in line with global norms.
Founded in 1953, AMCHAM is the largest and longest-standing foreign chamber here, with over 800 member companies and affiliates.
Despite the challenges posed by COVID-19, the chamber recorded its best operating performance in 2020, including a visible growth in membership, according to Kim and Jones.
The list of new members included Almonty Industries, a global mining company focusing on tungsten, the New York Times, which is relocating its Asia headquarters to Seoul, and a number of Korean companies investing in the US -- such as SeAH Steel, SK Innovation, LG International and CJ OliveNetworks.
Also, the chamber saw the number of women on its 34-member board reach a record high of seven. On the board of directors is Chae Eun-mi, managing director of FedEx Express Korea. The board of governors includes Coca-Cola Korea General Manager Choi Su-chong and Citibank Korea Yoo Myung-soon -- both of whom became the first female chiefs of their respective companies last year.
By Bae Hyun-jung (
tellme@heraldcorp.com)
