OSONG, South Korea (Reuters) - South Korea’s antitrust chief said on Monday that he will urge powerful family-run business empires including Samsung and Hyundai to “voluntarily” reform themselves when he meets executives in the wake of a bruising political bribery scandal.
Korea Fair Trade Commission Chairman Kim Sang-jo said he would begin a round of meetings with top executives from the so-called chaebols as soon as this week, amid calls for better corporate governance and greater transparency.
“I will pursue chaebol reforms through a positive campaign where companies voluntarily create exemplary cases,” he told reporters after his appointment last week by President Moon Jae-in to oversee the anti-trust watchdog.
“I will urge them to change if they continue practices that go against the hopes of the government, the society and the market.”
The government would take “appropriate action” if the conglomerates which dominate Asia’s fourth-biggest economy continued business as usual, Kim added without elaborating.
Transactions among group affiliates - long claimed by critics to favor the owning families and disrupt fair competition - would be closely analyzed and investigations could ensue if any wrongdoing was suspected, he said.
The former shareholder activist who campaigned against big businesses was considered an architect of chaebol reform pledges made by Moon during the election campaign last month.
Moon campaigned strongly for changes to the chaebols’ corporate cultures following the corruption scandal which led to the ouster of his predecessor, Park Geun-hye, and the arrest of Samsung Group chief Jay Y. Lee.
The conglomerates helped make South Korea a corporate powerhouse but critics say they have abused their power to crowd out smaller businesses.
They also blame the chaebol’s complex web of cross-shareholdings and opaque governance for devaluing their shares in comparison to their global peers.
Reporting by Hyunjoo Jin; Editing by Stephen Coates