LG Group officially withdraws from FKILG Group officially announced its withdrawal from the Federation of Korean Industries, the first conglomerate to do so. The company’s move is likely to prompt others to follow suit and eventually lead to dismantling of the business lobbying group that has long represented chaebol.
“We have decided to give up our membership with the Federation of Korean Industries by the end of this year and have officially delivered the renewed policy to the federation,” the nation’s fourth-largest conglomerate said in a statement Tuesday.
The conglomerate will no longer pay the 5 billion won ($4.14 million) annual membership fee after the new year, and said the decision was a follow-up measure to the plan it had unveiled earlier.
LG Chairman Koo Bon-moo said during a parliamentary hearing on Dec. 6 on the ongoing corruption scandal surrounding President Park Geun-hye, her aides and heads of top 10 conglomerates that his group would leave the lobbying group.
He even proposed that the federation should transform itself into a nonprofit think tank like the conservative Heritage Foundation in the United States and remain a social organization for chaebol.
Koo was giving a nod to Lee Jae-yong, Samsung’s de facto commander-in-chief and Samsung Electronics Vice Chairman, who promised to withdraw from the federation when lawmakers pointed out it had served as an evil pillar of the longtime alliance between the political and business sectors that only resulted in corruption.
Samsung is the biggest financial contributor to the lobbying group and is seen finalizing steps to drop out of the organization before the traditional New Year gathering takes place in February.
SK Chairman Chay Tae-won also said at the hearing he would join Samsung and LG. Some 20 SK subsidiaries are members of the organization.
The federation on Dec. 15 met with CEOs from member companies to discuss measures to overhaul the organization, but no one from Samsung, Hyundai Motor, SK or Lotte showed up.
BY SEO JI-EUN [firstname.lastname@example.org]