Charged With Embezzlement? Meh, Move Along…
You have to laugh, or else you will cry. The mK Business Daily reported that SK Group Chairman Chey Tae-won has been appointed to the Hynix board of directors. HUH? Now, as the largest shareholder of Hynix, there is no doubt that someone from SK Group deserves a place on the board. Zero doubt. However, does it need to be SK Group Chairman Chey, the same one that is being charged with embezzling almost USD 90,000,000 from SK, and its shareholders? By the way, those shareholders? Koreans, and most likely also Korea’s National Pension Fund. Just to get this straight: a person being prosecuted by the police, which is supposed to protect the inhabitants of Korea, are being laughed at by a company owned by the citizens of Korea. Looks contorted right? That is because it is.
Pathetic Day For Korean Corporate Governance
There is no doubt that Mr Chey is allowed to defend himself. Guilt or innocence has not been established. The Seoul Gyopo Guide has no bias in this matter, although it has commented on past digressions of the SK Group chairman and the very light sentence received for the accounting scandal at SK Group. However, in this case, Hynix Semiconductor has laughed straight in the face of these allegations, and of law enforcement. By putting Mr Chey on the board of directors, it has, in effect, said that the charges are unfounded, or that it doesn’t care. It could have named another high-ranking member of SK Group. As stated above, there is no doubt that someone at SK Group deserves a seat on this vital board. However, this type of thing doesn’t occur on the board of directors at Deutsche Bank, or General Electric. It wouldn’t occur until the person is cleared of charges. In G20 countries, it is customary for the board to be confirmed by election. In Korea? Don’t hold your breath: new board member Chey is almost certain to be confirmed, with no pushback from the remaining shareholders. It is a sad, pathetic day for Korean corporate governance.