Oases of privilege: the chaebols today

samsung-headquarters
Samsung headquarters in Seoul

The current South Korean corruption scandal (which we’ve been discussing this week) has blighted the images of the Brobdingnagian conglomerates – among them Samsung and Hyundai – that are known in that country as chaebols. Once admired – even revered – for helping transform South Korea into a respected powerhouse of technological production, the chaebols are now increasingly seen as oases of inherited wealth and privilege whose position of dominance and massive competitive advantage are unfair to start-up entrepreneurs and extremely unhealthful for the economy as a whole. That the chaebols have been shown again and again to be infected by immense levels of corruption at the loftiest levels has only further darkened their public image.

sk-group-headquarters
SK Group headquarters, Seoul

So has the staggering degree of impunity enjoyed by the highest-ranking chaebol executives and their families. As we noted in September, “however criminal or incompetent the head of a chaebol may be, he enjoys invulnerability and unaccountability on a scale unheard of in any other developed democracy.” As one South Korean businessman put it: “At companies in advanced countries, a faulty CEO is replaced. But at South Korean conglomerates, the head of a conglomerate wields absolute authority and is not replaced no matter how grievous his mistakes are.”

cj
CJ Group headquarters, Seoul

One of the matters being investigated in connection with the current scandal is the charge that President Park Geun-hye, in 2013, ordered her then economics secretary to pressure CJ Group (one of the largest chaebols) to fire its chairwoman, Miky Lee Mie Kyung. Lee, the granddaughter of Samsung founder Lee Byung Chul, had apparently angered Park by producing entertainment programming that was “unfavourable to the government.” In a clandestinely recorded conversation, Cho darkly warned CJ Group executive Sohn Kyung Shik “that there would be consequences if the request was not followed.”

choi%20tae%20won
Choi Tae-won

As we’ve seen, prosecutors have been interrogating some of the top guys at the very biggest chaebols. But prosecutors aren’t the only officials who want to talk to the chaebol honchos: on November 21, the ruling and opposition parties in the South Korean parliament agreed to summon the heads of the seven largest chaebols to testify as witnesses in that body’s own investigation of the scandal. Among them is Hyundai chairman Chung Mong-koo, who nine years ago was pardoned by then president Lee Myung-bak after being found guilty of embezzling $100 million to bribe government officials. Another prospective witness is SK Group chairman Choi Tae-won, who three years ago was pardoned by President Park after being found guilty of embezzling over $40 million. These guys, in short, are old hands at being caught with their hands in the till – and then being set free so they could resume their thievery.

Their testimonies are scheduled for the parliament’s first hearing on the scandal, on December 5; eight days later, Choi Soon-sil herself, the woman at the center of the whole shebang, will be questioned at another parliamentary hearing along with other suspected participants. We’ll be sure to keep our readers updated on developments.

7 thoughts on “Oases of privilege: the chaebols today

  1. 1st picture is NOT Samsung HQ but Samsung pavilion in Yeosu expo.

    3rd picture is NOT CJ HQ but just an annex of CJ office.

    That woulf be nice to begin with accurate pictures to have a trustful article…

    Like

  2. The relationship between so called Korean Chaebols and government is something that many foreigners just don’t understand. Without boring you with all the details, let me sum it up by saying – It’s a Two Way Street! It’s a love & hate relationship. It’s a you scratch my back, and I will scratch yours type of relationship. Please do NOT be so naive to think/publish articles about how Korean Cheobols are all corrupted and try to bribe their ways into winning more businesses, somehow, from the Korean government. Let me just give you one practical example. Korea, still has one of the highest level of university graduation rates. Korean government desperately needs to provide jobs for these university graduates. Every freaking year, Korean government forces many Korean cheobols to hire these university graduates although Hyundai, Samsung and other Korean conglomerates are struggling to keep up with global competition. Every year however, these companies hire thousands of graduates. If not, you will be black marked and who knows what is going to happen next right? Tax Audit maybe? This is just a very small example of all the stuff that goes on between the government and the conglomerates. Korea, is probably the most corrupted country in the world – probably at the level of places like Malaysia. However, if there is one thing that is consistent every year – from one administration to another presidential administration – and that is this you help me & I help you relationship between the government and the conglomerates. We are living in year 2016, and I am sure, even in a place like Korea, let me assure you that things are NOT what they appear to be.

    Liked by 1 person

    1. In other words, Korean choebols are super corrupt, and the government-private sector relationship is JUST like the Nazi IG Farben conglomerates in WWII.

      Korrupt KooRHeeYa.

      Like

  3. Korrupt KooRHeeYa.

    Choi Soonsil’s “Creative Korea” slogan she ripped off from France and pushed onto PGH should have been “Kriminal Korea” — more accurate/honest, and avoids plagiarism ^^

    Like

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