LG, KT announce withdrawal from Federation of Korean Industries

LG, KT announce withdrawal from Federation of Korean Industries


Two of Korea’s largest conglomerates, LG Group
and KT, have announced that they will leave the Federation of Korean Industries in the
coming days. Samsung and SK may quickly follow suit. Their departures could spell the end for an
organization that played a pivotal role in Korea’s rapid economic transformation. For more on why Korea’s corporate giants are
turning their backs on the nation’s richest business club,… Oh Junghee reports. “The Federation of Korean Industries should
be run like the U.S. think tank the Heritage Foundation, and as a social group for companies.” Three weeks after that comment at a parliamentary
hearing… LG Group announced on Tuesday… that it will
leave the Federation of Korean Industries at the end of this year. Another conglomerate, KT, said later the same
day that it would follow suit. These are the first official exits. But Samsung and SK Group — whose heads vowed
at the same parliamentary hearing that they would stop supporting the FKI — are known
to be reviewing the details of their membership withdrawal. The FKI is Korea’s largest business group
whose members include the country’s top 600 firms. It was established in 1961… mainly for the
government and businesses to coordinate in executing coherent economic policies. “But with the ongoing influence peddling scandal
involving President Park Geun-hye and her longtime confidant Choi Soon-sil… the group
came under fire for allegedly coercing conglomerates to make donations to Choi’s two government-linked
foundations.” Many have criticized the FKI as a channel
between conglomerates and the government that sometimes gets too cozy. Experts say corporations want to cut this
tie to the government because, for the big conglomerates, there’s nothing to gain by
staying in. “These days, corporations can make economic
policy suggestions to the government without necessarily going through the FKI. So staying in makes conglomerates feel they
pay large amounts of money for membership, but are scolded by the public about keeping
their connection to the government. Now that the impeachment motion is under review,
corporations will be thinking that this is an opportunity.” He says the existence of the FKI itself is
at risk, with other members likely to quit, too. State-run financial institutions like Korea
Development Bank or the Export-Import Bank of Korea are now finalizing their withdrawal. Oh Jung-hee, Arirang News.

Author: Kennedi Daugherty

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