Korea’s top automaker to withdraw from FKIHyundai Motor Group will leave the Federation of Korean Industries, the company said Tuesday, dealing another blow to the lobbying group after several of its conglomerate members withdrew due to public outcry about its alleged role in a pay-to-play scandal involving President Park Geun-hye.
All 11 subsidiaries, including Hyundai Motor, Kia Motors, Hyundai Mobis, Hyundai Glovis, Hyundai Card and Hyundai Steel, will leave the organization. With Hyundai’s departure, all four of Korea’s top conglomerates are out of the lobbying group that has served the interests of big business for 56 years.
Sources at Hyundai Motor Group said the company remained hesitant about leaving the FKI due to ties dating back to Hyundai founder Chung Ju-yung. Even though the federation was established by Samsung founder Lee Byung-chull, it enjoyed its heyday under Chung’s leadership from 1977 to 1987. He was also the longest-serving chairman of the FKI.
The absence of Korea’s four biggest conglomerates is expected to prompt other companies to jump ship as well. The combined annual donations of the four companies alone accounted for 77 percent of the federation’s membership fees as of 2015.
A meeting of board members that took place on Feb. 17 decided to slash the organization’s budget for this year by 30 percent to 23.5 billion won ($20.4 million).
The term of FKI Chairman Huh Chang-soo is scheduled to end this month, but the board has yet to reach a consensus on candidates for the successor. Some sources have mentioned CJ Chairman Sohn Kyung-shik, but CJ has not confirmed the rumors.
BY SEO JI-EUN [email@example.com]