Chaebol reduce charitable giftsMajor conglomerates in the country reduced their donations last year amid an alleged bribery scandal involving former President Park Geun-hye and her friend Choi Soon-sil and the implementation of a strict antigraft law.
Donations from the nation’s top 10 conglomerates fell by more than 50 billion won ($44.7 million) last year, from about 1.026 trillion won in 2015 to 974.8 billion won, according to data analyzed by market researcher Chaebul.com.
Hanjin Group, parent company for Korean Air and the now defunct Hanjin Shipping, showed the greatest fall in contributions, cutting their gifts a whopping 44.2 percent year on year.
Contributions from steelmaker Posco fell 30.8 percent year on year to 37.1 billion won and Lotte Group by 26.9 percent to 50.7 billion won.
By amount of donations, Samsung, the largest company by market capitalization, still topped the list with more than 470 billion won, though the amount is 11.7 percent off from a year earlier. Hyundai Motor Group, the second largest conglomerate, had 105.3 billion won donations, down 6.2 percent over the year before.
Conglomerates such as Samsung, SK Group and Lotte Group had been accused of being involved in the political scandal by donating to nonprofits run by Choi, reportedly in return for political gain. The Federation of Korean Industries, a major chaebol-run lobbying group in which these conglomerates were members, also was swept up in the scandal for pressuring its member companies for contributions.
In response to the aftermath, the federation last month changed its Korean name and vowed for a bold reform of the organization so it could serve as a communications channel for local and foreign businesses rather than a political lobbying group.
“We are very sorry for disappointing our member companies and the people with this shameful activity last year, and I would like to promise everyone that we will never be involved in political affairs or be used by such affairs from now on,” Huh Chang-soo, head of the federation and also chairman of GS Group said during a press briefing at the organization’s headquarters in western Seoul on March 24.
Samsung also announced a slew of measures to improve transparency in its social contribution program in February. Under new rules, all Samsung subsidiaries must receive approval from board members for donations to a third party exceeding 1 billion won.
Since the so-called Kim Young-ran antigraft law was implemented in September, companies have been tightening their screening for donations, according to industry sources.
Still, there are four conglomerates among the top 10 that increased their donations, according to Chaebul.com.
Charitable gifts from SK Group increased by 19.7 percent year on year to 172.7 billion won, ranking second in donations. LG Group donated 77.7 billion won, a 50.6 percent jump from a year earlier. Hanwha Group and Hyundai Heavy Industries Group also increased their charitable gifts.
BY KIM JEE-HEE [email@example.com]
More in Industry
Third-generation family members take key roles at LS Group
SK Bioscience to start Covid-19 vaccine clinical trials
Naver to spend ￦180 billion supporting stores and artists
Posco CEO wants to stay at post for another three-year term