Kim’s unique bond led to country’s global growth

Home > Business > Economy

print dictionary print

Kim’s unique bond led to country’s global growth


From left: Late President Kim Young-sam, right, shaking hands with former political rival and Hyundai Group founder Chung Ju-yung in October 1991 when the business tycoon held a ceremony celebrating his autobiography; In 1996 at the Blue House, Kim Young-sam, left, having a conversation with close friend E1 Group Chairman Koo Pyong-hwoi, who was then also the head of one of Korea’s five business lobby groups, the Korea International Trade Association; The late president, far left, awarding the Order of Industrial Service Merit to Lotte Group founder Shin Kyuk-ho in 1995. The award is given to those who made the biggest contribution to the Korean economy that year. [JOONANG ILBO]

Late President Kim Young-sam had a unique relationship with leading businessmen in Korea during his term and set the foundation for the successes many Korean companies enjoy today.

At times, he seemed anti-business, creating unpleasant relations with some businessmen, while at other times, he seemed pro-business by encouraging businesses to expand beyond the domestic market and take a more aggressive approach to globalization.

In the early stage of his term, tensions rose with the business community when he promised changes and reforms on how Korean conglomerates were doing business. He had the strong backing of the public as his approval rating skyrocketed to 80 percent.

One of the companies that faced Kim’s reform plans was Samsung Group. The conglomerate’s chairman, Lee Kun-hee, at the time was planning to expand the business portfolio to include the automotive sector, but Kim blocked the expansion, citing concerns that conglomerates were owning too much business in different industries.

It was said that he even went as far as to say he would oppose it until his dying breath.

But the late president changed his mind while visiting Australia and introduced “globalization” as his administration’s primary goal in November 1994.

“Aren’t we in an era of globalization where there are no borders?” Kim asked his economic aide, Han Lee-hun, on the flight back from Australia. “If it contributes to strengthening our nation’s competitiveness, we can’t stop Samsung’s automotive business.”

The following month, Samsung Group was given the green light to start its car business.

But the late President Kim and Samsung’s Lee clashed again in 1995.

During a press conference in Beijing, Chairman Lee harshly criticized the government, saying, “Korean businesses are minor league, bureaucrats are triple A and the politics are rookies.” This was to express his strong dissatisfaction with the government’s regulations and policies. Lee’s criticism infuriated the president, and the businessman was excluded from the list of CEOs who traveled to the United States with Kim.

But there was also a time when Lee was given clemency by the late president. In 1996, Lee was sentenced to two years of imprisonment and four years of probation by the Seoul District Court for his involvement in creating a slush fund for former President Roh Tae-woo. But the following year, Lee was among the 23 businessmen who were granted amnesty in celebration of National Foundation Day.

The unpleasant relationship was not restricted to Samsung. There was uneasiness between the late president and the late Hyundai Group founder, Chung Ju-yung. The two were rivals during the 1992 presidential race. After Kim won, Chung had to keep a low profile during Kim’s tenure.

But that didn’t stop Kim from putting pressure on the business tycoon. In 1993, Chung was convicted of forming slush funds. Hyundai Group affiliates had to undergo limitations on issuing bonds and intensive tax audits. Due to the pressure, the Hyundai Group founder finally announced his retirement from politics.

In his biography, Chung wrote, “I don’t even want to think about the political retaliation on myself and Hyundai since the 1992 presidential race.”

But as with Samsung’s Lee, during the National Liberation Day celebration in 1995, Kim pardoned the business tycoon. But the pardon wasn’t a sign of an improvement in their relationship, as Kim said he was pardoning the businessman for the greater good of the economy.

Chung passed away in 2001. At the funeral, the late president met Chung’s son and Hyundai Motor Group Chairman Chung Mong-koo and praised the contributions that the business tycoon had made to the Korean economy.

“It’s really sad that such a man who has made a mark has passed away,” Kim told the grieving son.

The late SK Group Chairman Choi Jong-hyun also had his share of uneasiness with Kim.

In February 1995, the Kim administration announced a plan that would reform conglomerates, including weakening the control of the founding families as well as dispersing strategic planning departments within conglomerates that controlled diverse business fields.

Choi that year was re-elected as the head of the nation’s biggest business lobby group, the Federation of Korean Industries. At a press conference, Choi criticized the government, stating that they have to face reality.

“Managing a widely diverse business might be the perfect strategy in these changing times,” Choi said. “Who will take responsibility when companies are broken up or abolished under the policy of limiting companies to a single specialty?”

Two days after the press conference, the National Tax Service started its tax audit of the SK Group.

Pressure was further increased when the Fair Trade Commission also investigated insider trading claims. Under pressure, Choi visited Hong Jae-hyong, then the deputy prime minister for the economy, to make an apology.

But Kim had close relations with some members of the business community.

Lotte Group founder Shin Kyuk-ho had a close friendship with the former president that dated back to the time when Kim was still a leader of the opposition party.

The Lotte founder introduced Kim Woong-se, then the CEO of Lotte Corporation, to the late president’s second son, Kim Hyun-chul, who married the CEO’s daughter.

Former lawmaker Park Chul-un wrote in his book that in 1990, when Roh Tae-woo, as the ruling party chairman at the time, tried to merge two opposition groups, one of which was led by Kim, Roh asked Lotte founder Shin to convince Kim to merge the two political parties, knowing they had close relations.

The late president also had a good relationship with former KT Chairman Lee Suk-chae. Lee graduated from the same high school as Kim’s son, Kim Hyun-chul, and during Kim’s tenure, Lee was promoted to high ranks, including minister of information and communication.

The late president also had close ties with businessmen from his alma mater, Kyungnam High School. They included Shin Joong-ho, Lotte founder Shin’s younger brother and the Purmil chairman, and Koo Bon-neung, the Heesung Group chairman and younger brother of LG Group Chairman Koo Bon-moo.

Kim also had a close connection to the late E1 Group chairman, Koo Pyong-hwoi, with whom he attended Seoul National University.


Log in to Twitter or Facebook account to connect
with the Korea JoongAng Daily
help-image Social comment?
lock icon

To write comments, please log in to one of the accounts.

Standards Board Policy (0/250자)