FKI to cut budget by 40 pct
The scandal-ridden Federation of Korean Industries (FKI) has decided to downsize its organization and cut its budget by 40 percent as it struggles to survive the biggest crisis in its 55-year history.
The chaebol lobby group also decided to change its Korean name but continue to use its English name. It said keeping its current English name is essential for maintaining its international business network.
On Friday, FKI Chairman Huh Chang-soo, who is also chairman of GS Group, unveiled a set of measures to overhaul the scandalhit business group that has been facing calls for dismantlement, following its involvement with Choi Soon-sil, a close friend of former President Park Geun-hye.
The FKI pressed 19 business groups to donate 77.4 billion won to the Mir Foundation and the K-Sports Foundation, which were established and controlled by Choi.
“We are deeply sorry for disappointing the public,” Huh told reporters at FKI headquarters on Yeouido, Friday.
“The FKI will fulfill its founding purposes and be reborn as a sound, hardworking business association. FKI and its members will make every effort to regain public trust.”
Under three principles — rooting out of collusive links between politicians and busi- nesses, enhancing transparency and strengthening its role as a think tank — the chaebol lobby said it has worked hard in recent months to draw up measures to revamp its organization.
First, it decided to change its Korean name to show its resolve that it would focus on representing the interests of its member firms, not their leaders.
“We will also abolish the gathering of heads of large conglomerates, which used to act as an FKI decision-making body. But from now on, our board of directors will make every decision concerning its management and operations,” Huh said.
The lobby group has decided to reduce its size and budget by 40 percent as Samsung, Hyundai Motor and other large conglomerates have abandoned their FKI memberships. Korea’s top four business groups previously accounted for nearly 70 percent of its 40 billion won annual membership fees.
It also plans to strengthen the role of the Korea Economic Research Institute (KERI) to turn it into the nation’s most prestigious think tank.
In order to cut collusive ties between politicians and business leaders, the FKI will scrap a division that has been supervising its dealings with other entities. It also decided to publish its activities and financial standing online twice a year to bolster managerial transparency.