[Moon in Office] Chaebol reform drive to bolster FTC

The election of Moon Jae-in as president of South Korea comes amid intensified calls to reform an economic landscape centered on family-run chaebol or conglomerates.

In light of such calls, Moon is likely to strengthen the scope and authority of the Fair Trade Commission, as he has repeatedly vowed to protect small businesses and root out unfair corporate practices.

“I will take the lead in reforming chaebol. The phrase ‘collusive ties of politics and business’ will completely vanish under the Moon Jae-in administration,” Moon said in his inauguration speech Wednesday.

According to Moon’s campaign team, a former division responsible for monitoring conglomerates will return to the FTC. The division was established during former President Kim Dae-jung’s administration. It aimed to eradicate unfair internal transactions at conglomerates.

It was, however, abolished in the late former President Roh Moo-hyun administration in 2005 due to opposition from major companies.

Moon may also abolish the FTC’s exclusive right to charge businesses for fair trade violations, which would pave the way for citizens to directly charge businesses.

Local conglomerates have also been closely monitoring Moon’s stances on chaebol and regulatory measures, as he has touted the need for distribution of wealth.

Moon has also said he will deal with crimes by chaebol based on a “zero tolerance principle.”

A revision of the commercial law to enhance corporate transparency and limit the power of a controlling shareholder were also among Moon’s election pledges.

Moon’s detailed plan includes allowing stockholders with one share or more to file a lawsuit against the company, aimed at guaranteeing involvement in management, and implementing a cumulative voting system when electing board of directors at companies.

Cumulative voting would give shareholders ballots that equate to the number of directors up for nomination, times the number of shares each shareholder owns, thereby allowing minorities to concentrate their votes to increase the chance of choosing someone who best represents them. 

By Kim Bo-gyung(lisakim425@heralcorp.com)