Four conglomerate chiefs have quit their posts as chief executive in the past month, raising speculation about the motives behind the series of apparently unrelated events.
Doosan Infracore chairman Park Yong-maan, Hanjin Heavy Industries & Construction chairman Cho Nam-ho, Lotte Group chairman Shin Dong-bin and Shinsegae Group vice chairman Chung Yong-jin have stepped down from their posts, although they intend to retain their positions as “board members.”
The business groups shared the view that their owners’ decision was intended to enhance specialized management by filling the CEO post with professionals.
Market observers, however, have criticized the chain of resignations without giving up their board member status, alleging that the move is to avert criminal or administrative sanctions for possible irregular practices.
Doosan Infracore, in its regulatory filing on March 30, said it had replaced Park Yong-maan with Lee Oh-kyu for its president and CEO post. But chairman Park will continue his position as a member of the company’s board of directors.
Hanjin Heavy Industries & Construction said Choi Sung-moon will succeed Cho Nam-ho for the president and CEO post. Cho will serve only as company chairman.
On March 20, Lotte Group chairman Shin Dong-bin ended his seven-year career as CEO of Lotte Shopping.
Shinsegae Group vice chairman Chung Yong-jin said on March 15 that he would step down from the chief executive posts at two major business units ― Shinsegae Co. and discount chain E-Mart.
Under commercial law, there is little difference between CEO and board of director in terms of their legal duties, according to a commercial lawyer.
“But CEOs could be held criminally accountable for the company’s illegitimate practices,” he said, adding that a president or CEO could not evade responsibility as the final decision maker of his or her company.
Some market observers alleged their resignations reflected the situation of Hanwha Group chairman Kim Seung-youn and SK Group chairman Chey Tae-won’s recent imprisonment over the groups’ irregularities.
Further, the Park Geun-hye administration has pledged to weed out unfair practices at big business groups.
In the case of Shinsegae, the prosecution has been investigating the allegation that vice chairman Chung ordered Shinsegae affiliates to back their sister bakery firm, Shinsegae SVN, and the allegation that E-Mart spied on its employees to discourage union activities.
In a similar vein, Samsung Electronics vice chairman Lee Jay-yong is also backing away from taking legal responsibility for management.
Despite market expectations that Lee would take greater responsibility as he has been promoted to vice chairman, the Samsung heir has stayed out of the board of the nation’s largest company so far this year.
By Kim Yon-se (
kys@heraldcorp.com)
