[OUTLOOK]A letter to the fair trade chiefDear Chairman Kang Chul-kyu,
I feel a little bit self-conscious writing this letter to you on the basis that we went to the same school. When we entered college in 1964, the average annual income per capita was less than $100 and everyone was hungry.
At the time, the catchphrase “Miracle of the Han River,” which the military regime modeled after the “Miracle of the Rhine,” was enough to drive us youths to work harder. Maybe that’s why there were so many people in our class who became bureaucrats, and several, including Lee Ki-ho, Kang Bong-kyun, Lee Suk-chae, Han Lee-hun and you, even became government ministers or minister-level high officials.
The National Assembly is very loud these days. The debate over the proposed revision of the Fair Trade Act seems to be a big part of the fuss. The proposal wants to keep the restrictions on the amount of total investment by business conglomerates in their affiliates, revive the government’s authority to track down bank transactions and limit the voting rights of shares held by conglomerates’ financial units.
It must be difficult for you as the head of the department in charge because the businesses are imploring you, while the governing party fully supports this proposal, to consider the fact that the fate of the country’s economy depends on this decision.
During our years in school and throughout your adult life, you have walked in the way of moderation. I believe that even your involvement with a certain civic group was part of your effort to correct the wayward deviation of the conglomerates.
I, as a person of little consequence in the past and now, had believed that I was more on the “radical” side than you, but it seems that we have changed our positions. Under this administration that seems particularly obsessed with loyalty, you are considered the vanguard of reform and I, a conservative agitator.
The percentages of foreigner-owned shares in Samsung Electronics and Posco are 54 percent and 70 percent, respectively. In the cases of Kookmin Bank and Korea Exchange Bank, the percentages reach 77 percent and 72 percent. Now it’s no longer ridiculous to imagine George, the American, and Tony, the Brit, becoming the chief executive officer of these companies and German Hans becoming the president of one of these banks.
As the foreign shareholders clamor for Samsung Electronic to transfer its headquarters to the United States, Sovereign, which has invested 176.8 billion won ($168 million), is attempting a takeover of SK Group, whose asset amounts to 47 trillion won.
A few days ago, I heard from a friend living in the United States that the U.S. government is reconsidering issuing E-2 visas to Korean business people. The E-2 visa is issued when Korean company workers visit their branches or production plants in the United States.
Reportedly, this discussion rose because Samsung Electronics and Posco are not considered Korean firms in the United States. How are we to survive if we hand over banks that supply life to the Korean economy and companies that lay the golden eggs?
At the last National Assembly inspection of the government, you remarked that we should consider implementing a system of differential voting rights to the main shareholders of Samsung Electronics in defense of any hostile takeover bids. Of course, foreign shareholders, minority shareholders and civic groups pounced on your suggestion and even the Ministry of Finance and Economy was not too happy to hear it.
There seems to be no possibility of your suggestion being taken seriously, but I thought you were right in your assessment of the situation. However, let’s look for things that could happen for sure within the power of the Fair Trade Commission instead of starting things that we won’t be able to finish. Isn’t there an easy way to get rid of regulations restricting investments and recognizing the voting rights of conglomerates’ financial services units?
Of course, we are astounded at the greed of the conglomerates in demanding the voting rights of their financial units while at the same time trying to reduce the voting rights on the funds that the government is trying to boost.
However, this “reverse discrimination” of trying to block the firms from reaching their full potential is detrimental for the greater good of our economy when so much foreign capital is rushing in.
It seems that your focus is in preventing the deviation of the conglomerates. You might claim that this is the job of your commission, but you don’t persuade me. The Fair Trade Commission is a commission formed for the good of the Korean economy and not for the good of the commission itself.
My concern is in a complete takeover of our domestic industries by foreign capital. In other words, I think the “main enemy” has changed. We need to hold the conglomerates in check, but a more urgent task is to protect our companies from negative foreign forces.
If you are still blaming the conglomerates while I am worrying about foreign capital, then you are the conservative and I am the progressive. Let’s have the wisdom of putting ourselves in each others’ shoes and change our opinion gradually.
If I changed my opinion, it would be of trifling importance, but if you changed your opinion, it would be a fine and noble thing and for the good of our economy.
* The writer is an editorial writer of the JoongAng Ilbo.
by Joseph W. Chung