Hankoryeh Editorial is Shocking (i.e. It’s Correct)
This is not to say anything specifically negative about The Hankoryeh. This editorial blisters the FKI (Federation of Korean Industries), which has, incredulously, asked for leniency in the prosecution of Chey Tae-won, Chairman of SK Group. He is charged with embezzling almost USD $90,000,000 for his personal investment use from SK. FKI has appealed to law enforcement, with the idea that SK Group is too important to the Korean economy. This is an age-old argument, and one that has been subject of this post.
FKI Lives in the Past
CLearly, FKI lives in a different era. “The lady doth protest too much, methinks” can be applied here. Perhaps, just maybe, the leadership of the companies in the FKI know that they may be next. Uh-oh indeed. So, of course FKI wants leniency, so that the precedent can be preserved. Most interestingly, this is the first time that SK Group’s accounting scandal has been mentioned in English print.
Chey Tae-won was granted a special pardon in 2008 after being sentenced to time in jail by the Supreme Court for large-scale accounting fraud in 2003.
Just as this blog had reported (ahem).
Wait, There’s More
Perhaps even worse is the fact that the leaders of the FKI do not understand that there are now foreign investors, who will demand accountability from the management of the companies in which they invest. Korea is no longer an insignificant, pathetic country. International investors seek out the shares of Korean companies because those companies are successful. That said, FKI clearly doesn’t understand that shareholders own the company, not management. On this point, even The Hankoryeh has failed to point out that this weakness has, is, and will result in lower profitability at Korean companies and lower returns for investors, which includes Korean citizens. Korea’s National Pension Fund is one of the largest in the world (4th), and its constituents are the Korean people.
Another Brick in the Wall
The Korean population has lived with this type of behavior for a very long time. In fact, you could easily suggest that Koreans are “used to it.” Well, populations in other countries are not “used to it,” and many will not tolerate it. Until Korea’s law enforcement steps up to defend the population, this new SK Group debacle will be just another example of why Koreans, while proud, feel as if there are limits to the upside of their creativity and ingenuity. The implications run far and wide; college graduates select employment at the chaebol instead of taking entrepreneurial risks. Even the underemployed, over-educated Korean college graduate doesn’t strike out on his/her own. That is changing, of course, as the smartphone has given many creative people in Korea an outlet for new innovations, which can be developed without much capital. A change at this level will take a long time to uproot.
In the end, The Hankoryeh has also done its part, by addressing this ludicrous request by the FKI. That may be the most shocking development of all: a Korean newspaper has rightfully blasted Korean corporate interests without reservation. One by one, the bricks can be loosened. Not at once, but one brick at a time. The Hankoryeh has done its part.