New Fair Trade Commission head Kim Sang-jo speaks of reforming conglomerates.[Photo by Yoo Dae-kil = dbeorlf123@ajunews.com]
South Korea's four largest conglomerates led by Samsung face a bumpy road as
the new head of a powerful state anti-trust watchdog vows to reform their unfair business activities and reduce their market dominance.
The Fair Trade Commission (FTC) will put Samsung, Hyundai Motor, SK and LG groups under "more strict" surveillance than other conglomerates, said Kim Sang-jo, a Hansung University economics professor appointed by President Moon Jae-in as new FTC chairman on Tuesday.
Kim's nomination means that "overcoming the economic crisis with an unfair market system is nearly impossible and that the government will build a fair market system to help revitalize the economy", the president's office said.
Chaebol should be reformed to restrain their economic concentration, Kim said, adding their corporate governance has disturbed fair competition and distorted the economic ecosystem. "It's important to create better jobs by reestablishing a fair market order."
Kim, 55, has spearheaded a civic campaign to end unfair business practices by South Kora's family-run conglomerates, or chaebol. He joined Moon's election camp in March as a key economic advisor. The professor has urged chaebol to enhance corporate governance, protect the interests of minority shareholders, and reduce their dominant role in South Korea's economy.
Samsung, Hyundai Motor, SK and LG group, which together account would for two-thirds of assets held by South Korea's top 30 conglomerates, would become the target of reforms which Kim said are not designed to dismantle chaebol but to promote their sound economic role.
The FTC's goal should focus on establishing fair competition to revive the vitality of South Korea's economy, Kim said, adding cross-shareholding is not his top priority as the practice has been cut dramatically in recent years. Cross-shareholding among group affiliates has used by chaebol owners to control their entire group with small stakes.
Moon has pledged strong economic reforms to enhance corporate transparency or advocate great spending on public welfare with money coming from increased corporate tax revenues.
The liberal leader has described chaebol's unfair business practices as "old evils" that should be eradicated, revealing antagonism to their dominant role in South Korea's economy. A corruption scandal involving ex-president Park Geun-hye and her aides fanned public anger at collusive ties between businessmen and politics.
Lim Chang-won = cwlim34@ajunews.com
reporter
Park Sae-jin
swatchsjp@ajunews.com
