A new Moon

Moon Jae-in

It’s a new year – and a new Moon Jae-in. Before he became president of South Korea, Moon referred to the chaebols – those hugely successful but profoundly corrupt and immensely powerful family-run conglomerates that dominate that country’s economy – as a “deep-rooted evil.” When Moon rose to the presidency in May 2017, he promised a serious campaign of chaebol reform. Yes, several of his predecessors had made similar promises, but Moon said his promises were for real. He appointed a so-called “chaebol sniper,” one Kim Sang-jo, whom he tasked with bringing the chaebols to heel.

Kim Sang-jo

In the more than year and a half since his inauguration, however, the South Korean people have seen very little in the way of reform. Once again, the promises have proven empty. As we saw a couple of weeks ago, Kim, in a recent interview, presented himself not as an anti-chaebol warrior but as a “reasonable reformist” who respects the chaebols and, far from cutting them down to size, seeks to render them competitive through “evolutionary reform.”

Jay Y. Lee, top dog at Samsung

Now Moon, too, is singing a new tune. As the Korea Times reported on January 6, “the President appears to be expanding communication channels to win backing from the country’s leading industrial conglomerates.” According to a spoksman for Moon, the President planned to meet with chaebol leaders some time in January and would ask them “to hire more and spend more,” in exchange for which his government would provide increased “tax benefits and administrative support.” Partly in order to win votes from younger members of the electorate who are in the job market, according to top government officials, Moon needs “to reach out his hands to Samsung, LG, SK and Hyundai,” the country’s “top four family-controlled businesses.”

Hyundai Motor Chairman Chung Mong-koo

That’s quite an about-face, even by high-stakes political standards. The man who vowed to be an anti-chaebol crusader is now going to the chaebols, hat in hand, and begging them for what is essentially a political favor – and, in response, offering to cut their taxes. In other words, it’s back to business as usual in South Korea, with the head of state and the chaebol kings scratching each other’s backs.

Already, reported the Times, “chief presidential policy chief Kim Soo-hyun met with senior executives at Samsung, LG and SK in a Seoul hotel late last year” in order to set the groundwork for the shift in approach. The question, it seems, is not whether Moon plans to woo the chaebol bosses; it is how the bosses will respond to his bootlicking.

LG Group headquarters

You see, they’re not all that happy with Moon, partly because of the aggressive anti-chaebol rhetoric with which he started his administration, and partly because his hike in the minimum wage has blunted their competitiveness abroad. It’s predicted that South Korean economy will grow only 2.5 percent this year, and the chaebols put a lot of blame for that at Moon’s feet.

The worm, then, has turned. The sometime chaebol slayer has become a servile brownnoser, trucking to the big boys at the “big four” – Samsung, Hyundai, LG, and SK – and hoping that they’ll respond positively to his kowtowing.

The clueless “chaebol sniper”

Kim Sang-yo: almost as tough and scary as Kim Novak

On December 18, the Korea Herald published the most extensive interview we’ve seen yet with Kim Sang-jo, who was appointed to a three-year term as head of South Korea’s Fair Trade Commission in June 2017 and who, tasked with reining in the power of the chaebols – the family-run conglomerates that are at once the engines of that country’s economy and the greatest hindrances to its growth – calls himself the “chaebol hunter.” Shin Ji-hye, the Herald’s reporter, maintained that Kim had made some progress, proposing key revisions to the Fair Trade Act that were approved by the Cabinet in November and await ratification by the National Assembly. Shin also sought to portray Kim as a sympathetic man in the middle, criticized from both sides, one of which assails him for failing to bring about promised reforms and the other of which accuses him of going too far in his purported war on the chaebols.

Hyundai headquarters, Seoul

In the interview, Kim also sought to depict himself as a man of balance – a “reasonable reformist,” who appreciates the value of the chaebols to South Korea and who seeks not to blunt their economic impact, let alone destroy them, but to make them competitive. In fact, it turns out that Kim no longer calls himself the “chaebol sniper” but, rather, wants to be known as an “evolutionary reformer” who “walk[s] the middle line.”

According to Kim, the key to proper chaebol reform, in Shin’s paraphrase, is “to put an end to ‘gapjil,’ unfair business practices employed by market monopolies, as well as undue inter-affiliate trading. Doing away with both is the main objective of the FTC’s proposed bills to amend the Fair Trade Act.”

Samsung headquarters, Seoul

Yet when it came to one of the major issues involving the chaebols — the most prominent of which include Samsung, Hyundai, and LG –Kim was as stubborn as any chaebol CEO. Noting that the U.S. Chamber of Commerce and four of its counterparts in other countries had signed a statement in November challenging South Korean regulations as well as the FTC’s approach to investigation, Kim defended the chaebol system and argued that it wasn’t reasonable for U.S. businesses to expect other countries to model their corporate structures on its own.

As for American investors who are major chaebol shareholders but who, in keeping with the antiquated traditions of the system, have been denied the kind of influence on corporate decision-making that they would enjoy in Western firms – and who, of late, have been raising their voices more loudly to complain about this unfair state of affairs – Kim said, “This is a sensitive issue,” then said of the most prominent of those investors that “its understanding of Korea still remains insufficient.”

LG headquarters, Seoul

In fact, when Kim swipes at a major international investment firm for its supposedly “insufficient” understanding of Korea he is confessing to the very provincialism that lies at the heart of the chaebol problem. It is no exaggeration to say that Kim’s remark is by far the most telling part of the interview, indeed the only part that really matters. It underscores the fact that chaebol reform has been placed in the hands of a man who, however well-intentioned he may be, just doesn’t get it.

He doesn’t grasp, in short, that halfway measures, parochial measures, are just not enough; he doesn’t realize that he’s thinking inside of a very narrow box, a South Korean box, when what is called for in this situation is a major adjustment in South Korean business practice and business thinking — an adjustment that will result in a system that conforms to international norms and will allow for international investment on the same terms that obtain elsewhere in the developed world. Kim’s interview leaves the unfortunate impression that, until South Korea puts the future of the chaebols in charge of another individual, someone with a more global perspective, hope for real chaebol reform will be entirely in vain.

Chaebol progress?

 

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

Hyundai headquarters, Seoul

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.

Samsung headquarters, Seoul

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.

Moon Jae-in

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.

Lee Kung-hee, chairman of Samsung Electronics

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.”

Hyundai Motor Chairman Chung Mong-koo

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.”

Marriage, chaebol style

 

Yes, they are royal families.

There’s nothing quite like them anywhere else in the world. The clans that run the South Korean chaebols – the relatively small number of sprawling, internationally famous conglomerates that have dominated that country’s economy since not long after the Korean War – have long been viewed as royal families. The top executive positions at these companies pass down from generation to generation; the men (they are almost invariably men) who hold these offices wield enormous power over the nation’s political class; and the sons and daughters of these bosses are celebrities, whose social lives are followed closely in the popular media, and who are often, indeed, described as princes and princesses.

Hyundai headquarters, Seoul

One thing that these chaebol families have in common with actual royal dynasties is the high level of intermarriage between them. According to a new survey, 49.3% members of the founding generation of the chaebol clans – the people who actually established these firms in the second half of the last century – are or were married to spouses who also belonged to families that founded chaebols. Among members of the second generation of chaebol ruling families,the figure is even higher: 52.7% of the people whose parents founded chaebols married other people who parents also founded chaebols.

In South Korea, just as the management of chaebols is almost universally dynastic matter, politics is also very often a family game. Former President Park Geun-hye, for instance, who is currently behind bars because of her involvement in chaebol corruption, is the daughter of former President Park Chung-hee. Many chaebol family members who do not marry into other chaebol families have, instead, married into powerful political families, which both reflects and reinforces the intimate ties that bind chaebol CEOs and Chairmen to officials at the highest level of the South Korean government. Among members of the first generation of chaebols, 23.4% were or are married to members of “powerful” political families; in the second generation, this figure declined to 7.4%.

Park Geun-hye

The survey produced some other interesting findings. Of all the chaebols, the GS Group, had the highest number of “in-law relations” with other chaebols, namely seven. GS, like most of these conglomerates, is highly diversified, although in its case there is a particular emphasis on oil, gas, and other energy-related products. The second chaebol on the list, with six “in-law relations,” was the LS Group, which manufactures power cables, electrical equipment, machinery, and other such products.

Why does any of this matter? Because these statistics serve to reinforce the perception, on the part of many ordinary South Koreans, that their country – in which democracy has, admittedly, made great strides over the last several decades – is still, to a deplorable extent, governed by a network of business and political kingpins, people who are tied to one another not only by shared financial interests and systematic corruption but, yes, by the most intimate of family bonds.

Cuba’s deadly disrepair

We’re so accustomed to seeing America’s mainstream media celebrating Havana as “exotic” and “quaint” and “unspoiled” that it came as something of a surprise to see USA Today, on December 2, running a piece headlined “How Havana is collapsing, building by building.”

A couple of Havana’s “architectural gems”

Reporters Tracey Eaton and Katherine Lewin didn’t pull any punches. They talked to one Rafael Álvarez, who “was up at 6:30 a.m. to warm milk for his baby daughter when he heard the sound of pebbles falling.” Next thing he knew, in his words, “the floor below us came loose. We were left hanging in the air, then fell into the abyss.” He ended up “buried in rubble to his waist.” But he was the lucky one. He lost his mother, daughter, and two others in the collapse of his apartment building. It was 101 years old.

Exotic Havana

They talked to Carlos Guerrero, who lives with his family in another building that looks as if it’s about to go any minute. “Neighbors tell them, ‘Get out of there! It’s going to collapse!’” They talked to Yanelis Flores, who says her own flat, where “daylight shines through terrifying cracks in the walls,” is “worse than a pig pen.” A staircase collapsed last year, stranding people on the upper floors. And they talked to Magaly Marrero, who “said her apartment is so bad that she showers in the kitchen and relieves herself in a bucket.”

And they talked to others. Plenty of others. They provided statistics showing that these anecdotes were only the tip of a massive iceberg. “In Havana,” they wrote, “some of the same architectural gems that draw tens of thousands of American tourists crash to the ground every year.” Their piece amounted to a powerful indictment of Communism.

Katherine Lewin

Except for the fact that Eaton and Lewin didn’t really focus on Communism as the ultimate cause of all this decay. No, when it came to causes they turned coy. Here, in fact, is how they put it: “Causes [for all these building collapses] range from weather and neglect to faulty renovations and theft of structural beams.” Well, yes, those may be the immediate causes. But the reason why these “architectural gems” haven’t been properly maintained over the decades – or torn down and replaced by safer structures – is, quite simply, Communism.

Tracey Eaton


If you’d taken a stroll around East Berlin just before the Wall fell, you’d have seen the same kind of miserable dilapidation – derelict blocks of flats that had pieces missing and in which you could still see bullet holes dating back to World War II. Venezuela, of course, is headed down the same road. Meanwhile in the U.S., we have a younger generation that’s been brainwashed into thinking that socialism is just dandy and that is sending the likes of Alexandria Ocasio-Cortez to Washington. Congratulations to USA Today, then, for documenting the dire consequences of Communism, but please: next time, be more up front about what’s really behind all this deadly disrepair.

Surprise! Another chaebol brat.

When South Koreans hear the word “chaebol,” which refers to the massive, family-run conglomerates that dominate their economy, they think about power, money, and corruption. They also think about the children of the chaebol CEOs, those princes and princesses who – not to overgeneralize – are often notoriously spoiled and inclined to abuse underlings.

Heather Cho

Just last week we recalled the infamous “nut rage” case of 2014, when Heather Cho, daughter of the chairman of the Hanjin Group, ordered a Korean Air flight (Hanjin owns the airline) back to the gate at JFK because she’d been served macadamia nuts in a bag rather than on a dish. This is only one of many such episodes that, for many ordinary South Korean citizens, have underscored the excessive degree of privilege that, in their view, poisons the chaebol dynasties.

On November 24 came another such story. According to the Straits Times, the ten-year-old daughter of Bang Jung-oh, president of the cable network TV Chosun, had been recorded some weeks earlier “verbally attacking and threatening” her chauffeur, a man in his fifties.

Apparently the driver had asked her to sit down. Apparently she refused. And apparently he insisted. Whereupon she said: “I told you I don’t want to….Why should I sit down? This is my car, not yours!” The driver replied by telling her to fire him; in response, she is reported to have asked (and let’s just preface this by saying that the English translation here could be a bit more felicitous): “Do you think I would get embarrassed? I’m not such a person who freaks out with this.” She went on to call her driver “a crippled guy – crippled without arms, legs, face, ears and mouth…especially devoid of mouth and ears….You are insane.”

Bang Jung-oh

Just wondering: do bratty American ten-year-olds come up with such bizarre insults? Or is this sort of thing unique to South Korea?

At some point the girl also told the driver, “I will speak to my mum today…in order to make you lose your job.” Then there was this: “You are fired! You are really insane.” And here’s another patch of awkward translation: “Hey, I’m speaking to you with good words. Perhaps I’m the only person who treats you like this.”

Just a bit more. “Hey, your parents taught you wrong,” she taunted. “All of your family members taught you wrong.” And here’s the coup de grace: “I really hate you. I want you to die. It’s my wish.” Charming child.


In fact, the chauffeur did end up being fired. In October. Without any explanation.

Then, in November, MBC TV released a recording of the girl’s rant. The worm turned. Her father – who, by the way, is the younger son of Bang Sang-hoon, president of South Korea’s largest daily, Chosun Ilbo – not only apologized to the chauffeur but announced his resignation.

So he’s out of a job. No word as to whether the chauffeur found new employment. Let’s just hope the child was appropriately punished and taught something about respect. We’re not betting on that one, though.

Finally: street protests against chaebol corruption!

Moon Jae-in

On this site we’ve been reporting for some time on the lavish vows by South Korean President Moon Jae-in to reform the chaebols, those massive family-run conglomerates that have served as the foundation of that country’s economy since not long after the Korean War – and that have increasingly been viewed with disfavor by that country’s citizens because of their extraordinary levels of corruption, nepotism, and impunity, not to mention their power to choke potential competitors in the cradle.

We’ve introduced our readers to Kim Sang-jo, not exactly intimidating man who was supposedly delegated by Moon with the task of challenging chaebol corruption and who, laughably, calls himself the “chaebol sniper.” And we’ve discussed the chaebol shareholders who, after years of biting their tongues, are finally starting to rebel against the bizarre system whereby clans that own only a small percentage of their companies nonetheless rule them with an iron hand.

Kim Sang-jo

Now comes some encouraging news. On November 21, with the backing of the Korean Confederation of Trade Unions (KCTU), more than 150,000 South Korean workers walked out of factories at firms like Samsung and Hyundai in protest against the utter failure of Moon’s government to come across with the chaebol reforms he promised.

The KCTU did not mince words in describing the situation in South Korea. “There has not been any real progress in chaebol reform,” it said. The KCTU added: “We think our labour rights as well as corporate reform have actually worsened under the Moon administration.”

Park Geun-hye

The KCTU further noted that the chaebol kingpins Lee Jae-yong (Samsung) and Shin Dong-bin (Lotte) had recently been arrested, tried, and convicted of bribing former President Park Geun-hye (who left office in disgrace because of the scandal) only to be given suspended sentences. Such special treatment for chaebol top guns is a longstanding tradition in South Korean politics and jurisprudence, and one that is making the nation’s citizens increasingly restive.

Hence the worker walkout.

Lee Myung-bak

That November 21 protest, moreover, was only one part of a growing nationwide uprising against President Moon. Every weekend of late, South Koreans have poured into the streets of Seoul in huge numbers to express their rage over Moon’s failure to keep his pledges. Describing these demonstrations as “raucous,” the Financial Times noted that while President Park and another former president, Lee Myung-bak, have ended up behind bars for corruption, the chaebol masters who were involved in the same acts of corruption still seem to be above the law.

According to FT, the probability that a chaebol boss convicted of corruption will get a suspended sentence exceeds 70% – while the comparable rate among non-chaebol leaders is 40%. As for poor schlubs who are found guilty of “street crimes,” such as petty theft, only 20% of them can expect to have their sentences suspended, even though the scale of their crimes is, of course, outrageously trivial compared to the monstrous malfeasances routinely committed by chaebol royalty.

More nuttiness from the nut-rage clan

Cho Yang-ho

The chaebol circus continues. On October 15, Cho Yang-ho, chairman of the Hanjin Group, which owns South Korea’s flag carrier Korean Air, was indicted on charges of embezzling $17.5 million from his firm and of using a scam to chisel $136 million out of the state insurance agency. An additional charge of evading inheritance taxes to the tune of $54 million was dropped because the statute of limitations had already expired.

Obviously, these chaebol CEOs aren’t paid well enough. They can’t get by without stealing everything that isn’t nailed down.

Heather Cho

Cho’s name may be new to you. But it’s possible you’ve heard of the older of his two daughters, Cho Hyun-ah, who is known in the West as Heather Cho and who, not so long ago, was vice president of Korean Air. Okay, perhaps you don’t remember her name, but do the terms “nutgate” or “nut rage incident” ring a bell? On December 5, 2014, Heather (as we’ll call her to distinguish her from her dad) was a passenger on a Korean Air flight that was about to take off from JFK Airport when she ordered the plane back to the gate. Why? Because Heather, who at the time was still the airline’s VP, had been served macadamia nuts that were in a little bag instead of on a plate. This outrage, which was in accordance with airline procedure, let her to physically assault the chief of the plane’s cabin crew and to order him off the plane.

Hanjin headquarters, Seoul

At first this episode was covered up by Korean Air. Airline employees, including the cabin-crew chief and a flight attendant who’d also been abused by Heather, were ordered to stay mum about it. Records of the incident were deleted. Authorities who were aware of the plane’s unorthodox return to the gate kept quiet about it. For a while there, a perfect cover-up seemed to have been put in place. But the story came to light anyway because a handful of passengers went to the media.

Heather’s tantrum made headlines around the world. It was especially big news in South Korea, unsurprisingly, where her conduct only served to reinforce the prevailing narrative about the arrogance and privilege of the chaebol princes and princesses and the readiness of authorities to cover up for them. Under pressure, Heather gave up one – but not all – of her titles at Korean Air (an absurd “solution” that seems typical of the bizarro world of the chaebols) and spent three months behind bars for having obstructed airline safety. Because of Heather’s temper, Korean Air ticket sales plummeted – while sales of macadamia nuts boomed.

Emily Lee Cho

That’s not all: it later emerged that the previous year, Heather had attacked a flight attendant because she didn’t like the ramen noodles she was served. And earlier this year, Heather’s younger sister, Cho Hyun-min, a.k.a. Emily Lee Cho, not to be outdone by Heather, was questioned over charges that she’d assault an employee of an ad agency working for Korean Air. (At the time, Emily was head of the airline’s marketing and advertising.) Obviously the whole family could use some treatment for anger management. 

As noted, Cho Yang-ho was indicted on October 15. In November came news that Grace Holdings, the second-largest shareholder in Hanjin KAL, the holding firm that controls the Hanjin Group, was seeking to remove Cho from Hanjin’s board of directors. Moreover, there were indications that other shareholders might join forces with Grace.

In another country, this might not be such massive news. In South Korea, it’s an earthquake. To remove the head of a chaebol family from control of his empire is unheard of. Such a move would be nothing less than revolutionary. It will be absolutely fascinating to see how this pans out.

Chaebols: are the “ants” finally rebelling?

The South China Morning Post recently ran a fascinating piece by Geoffrey Cain and Max Kim. Its premise, as stated in the first sentence, was as follows: “The family-run conglomerates that power South Korea’s economy have long been above listening to individual shareholders – or ants. But as the scandals mount, and take down presidents, those ants are fighting back.”

Samsung headquarters, Seoul

We’ve written frequently at this site, of course, about those South Korean conglomerates – known as chaebols – that are notorious for their outsized power and corruption and for the perverse fact that the power is in the hands of families that own small percentages of these behemoths and not in the hands of shareholders.

Just as a certain 2016 presidential candidate called ordinary Americans who work hard and pay taxes “deplorables,” the people who actually inject their own cash into these companies – and are therefore, technically, their owners – are called “ants.”

Hyundai headquarters, Seoul

Cain and Kim noted a couple of the high-profile corruption trials and convictions that have taken place in the last year or so and that we’ve written about here. But they added this highly interesting point: “In fried chicken and beer joints, in coffee shops in Seoul’s financial district of Yeouido, and in mobile app chats where investors circulate industry gossip, individual shareholders – known as ‘ants’ in investment circles – are getting rowdy and putting up a fight.”

LG headquarters, Seoul

About time. To some of us, the passivity of chaebol shareholders has never made a great deal of sense. It can only be understood as a cultural thing, a sign of the near-reverence with which the chaebol families have long been regarded. After the Korean War, these families founded these companies, and these companies, in turn, raised South Korea up from an impoverished Third World land to an economic powerhouse. Hence the family patriarchs came to be viewed as virtual royalty.

Hanjin headquarters, Seoul

But no more. “Corporate shareholder meetings have stretched for more than a dozen hours,” wrote Cain and Kim, “as shareholders barrage CEOs with questions; others have stormed the microphone, only to be removed by security.” They quote one “ant’s” summing-up of the way South Koreans have been trained to think about these things: “Finance is like the written word of ancient times,” he said. “It is the privilege of the ruling class. It is the preserve of the elite.” Well, if these signs of revolt are portents of a new era, then that kind of old-fashioned deference to a handful of powerful clans may well be on the way out. Which, it has to be said, is a healthy sign for South Korean democracy.

The chaebol suicides

Samsung headquarters, Seoul

Another week, another stroll down memory lane. Chaebol memory lane, to be specific. In recent weeks we’ve been recounting the stories of various top-level executives of these massive South Korean conglomerates – men who, as is their wont, have ended up in hot water, and often in courtrooms (and, sometimes, at least briefly in prison cells) because of their corruption.

To be sure, chaebol leaders who get caught with their hands in the till don’t always end up arrested or imprisoned or pardoned. The South Korean shame culture leads some of them to take their lives. You might wonder why, if the shame culture is a powerful enough psychological phenomenon to drive these people to suicide, it doesn’t keep them from bribing and embezzling and so on in the first place. But that question is perhaps beyond the scope of this blog.

Chung Mong-hun

Here are a few examples of high-level South Korean self-slaughter. On August 4, 2003, Chung Mong-hun, the chairman of Hyundai and the son of its founder, jumped to his death from his 12th-floor office window. As the New York Times put it, Hyundai was South Korea’s “economic ambassador to the Communist North”; Chung had played a key role in arranging an historic summit in June 2000 between Kim Jong Il and South Korean president Kim Dae Jung. Afterward, however, South Korean auditors looked into the behind-the-scenes dealings relating to the summit and found that Chung had illegally paid a massive bribe to Pyongyang. He was about to be arrested for this crime when he chose to take the leap from his office window.

Roh Moo-hyun

On May 23, 2009, Roh Moo-hyun, who had served as president of South Korea from 2003 to 2008, killed himself by jumping off a cliff near his home. He had been under investigation for accepting $6 million in bribes from the business sector during his presidency. He had already been interrogated, and his wife was scheduled for questioning by investigators on the day of his death. He had already said that he “was losing face and that he was disappointing his supporters”; in a suicide note, he wrote: “nothing is left in my life but to be a burden to others….Don’t be too sad. Aren’t life and death both a piece of nature? Don’t be sorry. Don’t blame anyone. It is fate.”

Lee In-won


Two years ago it was Lee In-won’s turn. Lee, the #2 man at the Lotte Group, which at the time was South Korea’s fifth largest conglomerate, when he was
found dead in August 2016 beside a walking and cycling path near Seoul; he had hanged himself from a tree with his necktie. Lee, age 69, had spent 43 years at Lotte, where he was the highest ranking official not belonging to the conglomerate’s ruling Shin family. His suicide took place two months after police – tipped off about crooked deals among Lotte subsidiaries that led to the formation of a slush fund – raided the firm’s offices in search of evidence of those crooked deals. At the time of Lee’s suicide, he was scheduled to be grilled by prosecutors about these irregularities.

Lotte has less of an international profile than other major chaebols such as Samsung and Hyundai because its wealth is derived not from high-tech products exported around the world but primarily from apartment buildings, hotels, malls, cinemas, fast-food restaurants, and other such busineses in South Korea. It has about 80 subsidiaries and over 300,000 employees. The New York Times reported that Lee “was one of the professional executives commonly known in South Korea as vassals, for their loyalty to the families that control the business empires. These executives rarely betray their bosses during corruption investigations.”