The current chapter in the history of the chaebols continues to develop in exceedingly interesting ways.

As we have been discussing on a regular basis at this site in recent weeks, these massive, heavily diversified, internationally famous, and family-run conglomerates – which have dominated the South Korean economy since shortly after the Korean War, raising the nation up from indigence to prosperity even as its government moved gradually closer to real democracy – have hit on challenging times. Once engines of growth, the chaebols are now barriers to further growth, so large and powerful that they’re capable of crushing, with little effort, the development of new firms and stifling the spirit of entrepreneurship.

As a result, in South Korea there is hardly any way to make a respectable career in business other than to find a job at one of the chaebols. And however talented and motivated one may be, there is no way to rise to the very top of one of the chaebols unless one happens to have been born into the right family. This state of affairs has led to growing resentment toward the chaebols – a resentment intensified by the corrupt ties between the chaebol dynasties and the country’s political elites, and, perhaps most bizarre of all, by the fact that the people who hold tight to the reins of power in these conglomerates are not necessarily the same people who own the lion’s share of their stock. On the contrary, it is rare indeed for the stockholders in the chaebols to have much say at all in their actual management.

As we’ve discussed here, and as Kim Jaewon noted in a recent article for Nikkei, South Korean Moon Jae-in, upon his inauguration in May 2017, promised major chaebol reform. To be sure, it is a tradition for newly installed South Korean presidents to vow chaebol reform. But Moon spoke so insistently about the matter that he persuaded a good many citizens of his country that he really meant to do something. As the weeks and months have gone by since he took power, however, fewer and fewer have looked upon his assurances with confidence; and, as the usual arrests for corruption have taken place, followed by the usual pardons for the chaebol executives involved and the usual prison terms for the politicians, once again cynicism about the chaebols has been on the upswing.

It is in this atmosphere that a few bold chaebol shareholders are finally standing up to the perverse power arrangement that they have quietly accepted for so long. These activist investors, observed Jaewon, “have scored minor victories at Samsung and Hyundai, while the parent of Korean Air Lines has been called to account by a domestic fund.” At the head of the list of these investors, wrote Jaewon, is the New York-based Elliott Management, the world’s largest activist fund, which has been campaigning “to force Samsung Electronics and Hyundai Motor to increase shareholder returns.”

This campaign by activist investors has already begun to bear fruit. In early December, Samsung Electronics “retired 7% of its common stock and 8.9% of its preferred stock worth 4.9 trillion won ($4.4 billion)” in an effort to provide shareholders with greater benefits. Hyundai Motor recently announced plans to “buy 2.8 million treasury shares worth 254.7 billion won by the end of February to boost its stock price and shareholders’ value.” In December, it even took the action – surprising within a South Korean context – of “promoting several foreign executives to senior roles, a first step toward the management diversification long demanded by minority shareholders.”