Saenuri submits 2nd chaebol bill

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Saenuri submits 2nd chaebol bill

The ruling Saenuri Party submitted yesterday the second bill on economic democratization aimed at preventing owners of conglomerates from reaping private profits by increasing internal transactions within their groups.

Lawmaker Lee Jong-hoon, from the ruling party’s subgroup of 24 members designated to improve democratization, said he proposed a bill to revise the anti-monopoly and fair trade law at a public hearing yesterday.

It is the second bill that aims to block owner families of conglomerates from gaining private benefits by committing unfair trade practices.

The first bill was submitted on July 16 by the same group in the Saenuri Party.

The bill requires chaebol workers to be imprisoned for 15 years or more if they embezzle more than 30 billion won ($26 million) of corporate money.

The minimum prison sentence for those who are found guilty of stealing from companies’ coffers is three years. The law bans the judicial authority from sentencing guilty chaebol families to probation.

The second bill puts a ban on including companies set up by chaebol families for private purposes as subsidiaries of their groups. According to Lee, 63 businesses that are owned by chaebol families are subject to this ban.

Under the current law, conglomerates only need to report to the Fair Trade Commission if they want to add their privately established companies to their groups.

The problem is such private companies are used as a means to rake in profits as the entities get special orders from their parent or sister companies at the expense of small and medium enterprises.

“It would be difficult for subsidiaries to avoid favoring companies created by their owners, because the owners exercise absolute influence on subsidiaries,” Lee said.

The lawmaker also called for a need to impose fines on conglomerates that continue to do so, or demand corrective measures in the bill.

Meanwhile, the business community remained quiet about the second bill. “Since it is a politically sensitive time, business lobbying organizations tend to give no official comments,” said an official at the Federation of Korean Industries.

By Song Su-hyun []

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