Shame on the endless family feud

PARK SU-RYEON
The author is head of the IT industry news department at the JoongAng Ilbo.

The business community has been in an uproar due to family disputes and conflicts. Siblings and couples sue one another over management rights and wealth inherited over two or three generations.

This is not the first time. Only a handful of major conglomerates did not go through the “brotherly conflicts” in the succession process after the founder. Whenever the management is passed from the founder to the next generation, the discord repeats, and they engage in a fierce media war.

Lately, a dramatic element has been added to their scandals. Private equity funds are involved in sibling disputes and brother-sister disputes are increasing. A divorce lawsuit also involves stocks valued at trillions of won.

Either way, it is a battle that ordinary people cannot imagine or sympathize with. Nevertheless, the public’s interest is great because the future of large corporations, which contribute to employment and GDP, is at stake. In particular, if the family members of a listed company compete for stakes, the stock price fluctuates regardless of the actual value of the company. Individual shareholders suffer as a result. Nevertheless, the public is not surprised, as similar discords have repeated for generations in many large corporations.

Unlike Koreans who have grown insensitive to the disputes, these wars seem strange and exotic to the eyes of non-Koreans. The New York Times on Dec. 18 reported on the LG Group family dispute. The inheritance battle of the fourth largest company in Korea with an asset of 170 trillion won ($131.8 billion) was broadcast around the world.

The episode of the controversial conversation between current Chairman Koo Kwang-mo and the spouse and two daughters of the late former chairman Koo Bon-moo was described as a scene from a novel or a movie. Many readers had a bitter laugh when reading the cold views of the global investors cited in the article and the follow-up article, titled “Chaebol Families Dominate South Korea’s Economy.”

Major Korean companies operating around the world are global companies. As the world has changed, many point out that the heads should not be used as a background for the president’s visit to a traditional market and instead focus on competing with their global rivals. People hope for sustainable growth of the Korean economy rather than the success of the administration.

However, some companies haven’t gotten out of the management rights succession and inheritance disputes. While the dirty gossip is spreading, the pioneering spirits of the founders and the legacy of the predecessors are long lost. As long as their family scandals repeat themselves, their demand to lower one of the world’s highest inheritance tax rates — up to 60 percent of the inherited assets when the premium for the biggest shareholder is applied — will remain up in the air. Ordinary people’s prediction that they will repeat the same thing over and over is reasonable enough. Am I wrong?