[EDITORIALS]Don’t tie companies’ hands

At yesterday’s National Assembly session, legislators from both the ruling and opposition parties criticized government antitrust policy, saying that domestic companies shouldn’t be left with their hands tied, exposed to threats of hostile mergers and acquisitions from overseas. The legislators also called for measures to protect companies from the potential for blitzkrieg-like offensives, and withdrawals, on the part of speculative foreign capital. It is fortunate that the Assembly has recognized, though belatedly, the problem of reverse discrimination against domestic companies that the administration has neglected in its prejudice against big business.
The threat of hostile action from foreign capital has grown high. SK Group is busy defending its management rights against Sovereign Asset Management’s offensive, and Samsung and other leading companies are in emergency situations. The average level of foreign investment in 10 leading businesses, including Hyundai Motor, is over 44 percent. Foreign investors can threaten management rights and can sell shares for short-term profit. Among listed companies, the largest shareholders of more than 30 are foreign investors.
We should not view foreign capital negatively. If utilized well, mergers and acquisitions can boost the value of businesses, enhancing the effectiveness and transparency of management. But there shouldn’t be reverse discrimination barring domestic companies from defending their own management rights, while foreign investors are allowed to do so. If Korean businesses are dissolved into thin air being sold at bargain prices because of such a blind spot in our system, it will mean an enormous loss of national power. If we don’t have protection against the abrupt withdrawl of speculative foreign capital, our economy will be shaken to its roots.
Unfair business practices can be checked in other ways. The Federation of Korean Industries proposed limiting the application of investment ceilings to the top five conglomerates, and suspending for two years the restriction on voting rights of shares of conglomerates financial subsidiaries. If the Assembly sees the seriousness of the problem, it should fully examine alternatives. The Fair Trade Commission must handle this issue from a national perspective. We can’t let hatred of big business lead us to place the nation’s assets in foreign hands.