Seoul contenders target chaebol culture
Presidential contenders pledge to shake up corporate governance
The frontrunners for the South Korean presidency have vowed to end the cosy relationships between government and big business — and the practice of pardoning convicted executives.—
The leading contenders in the race for the South Korean presidency have laid out their corporate reform agendas, vowing to end presidential pardons for convicted top executives and promising to shake up governance at the conglomerates.
The remarks to the Financial Times will chime with voters hoping the impeachment this month of Park Geunhye as president will prove a turning point for reform in a nation plagued by corruption.
However, the comments will probably raise concerns at the family-run chaebol, particularly Samsung, whose de facto chief Lee Jae-yong is on trial on corruption charges linked to the scandal that toppled Ms Park. Mr Lee denies wrong doing .“We need to establish the fairness of the law by banning pardons and increasing statutory punishments so it is impossible for executives to get suspended sentences when they have committed serious crimes,” said presidential frontrunner Moon Jae- in of the opposition Democratic party.
Ahn Hee-jung, governor of South Chungcheong province and Mr Moon’s main rival for the presidency, also vowed to end presidential pardons, saying: “Unprincipled immunity and reinstatement go against judicial justice.”
South Korea has a history ofpresidents pardoning convicted executives of companies they deem too big to fail.
Most recently, Ms Park in 2015 freed Chey Tae-won, chairman of SK Group, who was convicted of embezzling more than $40m from companies under his authority.
Now South Korean prosecutors are questioning senior executives at SK — the country’ s third largest conglomerate — over allegations they paid bribes to a presidential adviser in order to secure Mr Chey’s pardon.
The cosy relationship between big business and government has been a feature of South Korean politics since the 1960s when President Park Chunghee began using the chaebol to spur economic growth.
However, the nexus has become increasingly fraught, with many South Koreans aggrieved at the perceived bias in the country’ s system of justice.
“We need to resolutely disconnect the cosy relationship between the government and business,” said Mr Moon, a former human rights lawyer who is dominating polls.
The rhetoric may soon be put to the test if Mr Lee, arguably the country’s most powerful man, is convicted.
Samsung yesterday said it could not “speculate regarding the nature or effect of future policy decisions that may be undertaken by government ”.
“Samsung did not pay bribes nor sought any favours ,” it told the Financial Times. “We believe future court proceedings will clarify all issues and prove Mr Lee’s innocence.”
According to a Realmeter survey released yesterday, Mr Moon has nearly 37 per cent support while Mr Ahn has about 15 per cent.
As both candidates hail from the Democratic party, the result of its party primary in April is likely to offer a strong indication of who will win the presidential poll on May 9.
The ruling conservative Liberty Korea party has found itself without a clear candidate after Hwang Kyo-ahn, the country’s acting president, ruled himself out last week.
Both Mr Moon and Mr Ahn have also vowed to boost corporate governance by improving transparency and tack ling the opaque ownership structure of many of the country’ s top companies.
“The key to chaebol reform lies in governance and ownership structure reform ,” Mr Ahn said.
Moon Jae-in, frontrunner in the race to become South Korea’s next president