Fearless but prudent prosecutionThe prosecution plans to seek a court warrant to arrest Hyosung Group chairman Cho Suck-rai and his sons after an investigation into charges of embezzlement and tax evasion. They could join a handful of corporate executives who have been led to court and prison for corruption and tax-related crimes. The judiciary has recently turned decisively stern against large companies, conglomerates and owner families, sending a strong message that the country will no longer protect chaebols and the “too big to fail” companies. SK Group Chairman Chey Tae-won and his brother, Vice Chairman Chey Jae-won, are in court custody on counts of embezzlement. The father and son of the owner family at LIG Group and the mother and son of the family-owned Taekwang Group are also in custody. The court has no mercy for age or health. Hanwha Group Chairman Kim Seung-yeon and CJ Group Chairman Lee Jae-hyun received trials in poor health.
Large companies have brought about this debacle on themselves. Owners and executives of large family-owned companies have escaped penalties for corruption and wrongdoing with mostly pardons or shorter sentences over the last two decades. Social resentment against the chaebol exploded during last year’s general and presidential elections. The no-exception principle for punishing even large corporate owner families for wrongdoing has become unavoidable.
This year’s scandals associated with chaebol companies are nothing new. The companies were suspected of the same charges four to five years ago. The prosecution at the time sat on the cases without even attempting to search and investigate them. This year, they did the opposite, raiding without warnings and expediting arrest procedures. The executives who were hit are said to have been close to the Lee Myung-bak administration. This is why the companies complain that they have been targeted as scapegoats.
Unprecedented depression and lethargy prevail in the corporate sector. Businesses have been invaded by prosecutions, taxes and anti-trust probes. Large overseas deals or investment projects are pushed aside because executives are preoccupied with legal or prosecution procedures. Except for Samsung Electronics and Hyundai Motor, most major companies reported poor sales and profits in the first half. The judiciary needs to be prudent with its sword of justice. If it uses its authority by popular demand, the corporate world could be devastated. It must not be tolerant of wrongdoings by large companies, but at the same time must be careful not to overstretch.