SK Group leaves embattled big business lobbying groupSK Group, the nation’s third-largest conglomerate, will leave the Federation of Korean Industries, a lobbying group for big business that has faced scrutiny for its involvement in a pay-to-play scheme that allegedly included President Park Geun-hye and her long-time confidante Choi Soon-sil.
Two major affiliates of SK Group, SK Innovation and SK Telecom, filed papers for withdrawal from the organization on Thursday. Eighteen other affiliates will also leave the controversial group soon.
SK Group’s withdrawal means Hyundai Motor Group is the only top-four conglomerate left in the organization. Hyundai has yet to release an official statement regarding its membership but has said it will stop paying annual fees to the organization, essentially halting much of its activities in the lobbying group.
LG Group, Korea’s fourth-largest conglomerate, was the first to leave the Federation of Korean Industries on Dec. 27. Samsung Group, whose founder Lee Byung-chull started the lobbying group in 1961, followed last month on Jan. 6.
With three of the country’s four biggest conglomerates gone, the fate of the group hangs in the balance. Donations from these four companies have usually accounted for over 70 percent of annual fees collected by the group.
The Federation of Korean Industries, which boasts around 600 members, faced public backlash last year when prosecutors found that its members were forced to donate money to foundations run by Choi Soon-sil, a close friend of President Park. In return, companies allegedly received political favors.
The leaders of nine conglomerates were brought into questioning by the legislature in December. During the hearing, they vowed to leave the lobbying group.
The Federation of Korean Industries has scheduled a board meeting today and general meeting next Friday to select its chairman after Huh Chang-soo, the current chairman and also head of GS Group, steps down from the post. But with some of its biggest members leaving, the organization may have trouble finding a successor.
Although Hyundai Motor Group remains in the group, it has chosen not to join the board meeting.
BY KIM JEE-HEE [firstname.lastname@example.org]
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