FTC chairman tells chaebol to play fairly

FTC Chairman Kim Sang-jo at the Korea Chamber of Commerce and Industry headquarters in downtown Seoul Thursday. [YONHAP]

Fair Trade Commission (FTC) Chairman Kim Sang-jo has once again warned conglomerates that Korean society will not tolerate major businesses taking advantage of their market dominance to offer more work to affiliates.

The head of Korea’s top antitrust agency on Thursday met with executives from the country’s top 10 companies, including Samsung Electronics, Hyundai Motor, SK, LG, Lotte and Doosan.

This is Kim’s third meeting with conglomerate executives since he took office last year. The last two meetings were in June and November of last year. The guest list was bigger this time, with twice as many companies invited.

The meeting took place on the same day that the Moon Jae-in government celebrated its first year in office.

“It’s been a year since the new administration launched,” Kim said. “In some parts, they say the government has been too soft when evaluating chaebol reform,” Kim said. “On the other hand, there are those that think the government has been tightening regulations on [conglomerates] too much.”

“The FTC is listening to both arguments,” Kim said. “We will determine the speed and the intensity of chaebol reform with consideration for both views consistently, whether it be for three years or five years.”

Kim once again raised the need to completely eliminate past practices that saw major companies allocating the majority of its works to affiliates.

“Such practices provide unfair profits to the families that hold the majority stake in the companies at the expense of small and medium-sized businesses, even leading to the illegal inheritance of businesses and damaging competitiveness,” Kim said. “It harms a fair economy and limits innovative growth.”

He said companies should preemptively improve themselves instead of trying to avoid government audits and regulations by finding loopholes.

Kim commended companies for changing their corporate governance structures, pointing out that such steps now only tie in with the current administration’s policy, but also the expectations of the market and society in general.

“It’s positive that these changes are not only limited to several companies but are spreading to other companies as well,” Kim said. “I will continue to communicate with the business community and to positively respond if leading businesses request meetings to discuss government corporate policies or innovative growth.”

BY LEE HO-JEONG [lee.hojeong@joongang.co.kr]