Lotte’s lessonsLotte Group Chairman Shin Dong-bin’s attendance at the National Assembly as a witness in a legislative audit of the government has ended without much substance. Lawmakers from the ruling Saenuri Party and opposition New Politics Alliance for Democracy (NPAD) simply repeated the problems at the fifth-largest conglomerate in Korea just as they did when the disgraceful family feud over control of the Korean-Japanese business group broke out last month.
They didn’t show sharp images as lawmakers, who should grill witnesses after finding some rational basis for criticizing malpractices in the corporate sector. As Kang Gi-jung of the NPAD mentioned yesterday, the parliamentary audit of the government offered a chance for the witness to make excuses for what the business group - and the two brothers - have done so far. On social network service platforms, many people sarcastically asked if it was a press conference or a government audit session. We are dumbfounded at the fact that as many as seven standing committees of the assembly competed to bring Shin in for questioning.
Some opposition lawmakers even tried to take advantage of the chairman’s attendance to address civil complaints from his own constituency. Shin Hak-yong, a lawmaker from the opposition, pressured him to give up Lotte’s ongoing construction project to build a golf course in his own district in Incheon. Instead of raising an issue of Lotte’s abnormally complex governance structure based on countless cross-shareholding, he brought up a totally separate issue. Even after his allotted time for questioning was over - and despite his fellow lawmaker’s urging him to stop - he went on attacking the chairman emotionally.
Nevertheless, the questioning reaped some results. Chairman Shin took part in the parliamentary questioning for the first time as a chairman of one of the top five conglomerates in Korea. His decision to comply with the legislature’s summon reflects the level of a sense of crisis at Lotte Group. As it turned out, massive anti-Lotte sentiment has forced the chaebol into an unprecedented predicament. Civic groups launched boycott campaigns against the group, not to mention mounting pressures from the government and political circles. That led Shin to confront the crisis like a man. It was quite refreshing for the public to see a chaebol head be forced to make testimony and explain what had gone so badly wrong at his group.
Shin promised to accept most of the problems raised by lawmakers and fix them. He once again apologized for the group’s aristocratic governance structure and the shameful discord inside the family over the control of the conglomerate. He also pledged to advance the date for easing the intricately connected cross-shareholding as early as October, along with a commitment to pursue transparent management and mutual prosperity. But actions speak louder than words. Shin must not use his appearance at the audit as a chance to avoid public pressure. Our chaebol have so far promised to improve their governance structure, but often ended up reneging on their vows. Shin should not forget why he was summoned to the audit in the first place.
JoongAng Ilbo, Sept. 18, Page 34