Go to contents

[Reporter's View] After imitating conglomerates

Posted April. 20, 2001 12:40,   


With the ``venture boom`` since 1998, the ``venture spirit,`` a strategy to compete based only through technology and ideas, was expected to become a driving force to resuscitate the national economy. Behind the logic is the self-reflection that the 1997 financial crunch was caused by the conglomerates`, or chaebols`, outmoded expansion-oriented policies based on the assumption that they were too big to fail. However, such an expectation for venture businesses was scuttled in the wake of the breakout of large-scale financial scandals involving Chung Hyun-Joon, chairman of Korean Digital Line, and Jin Seung-Hyun, vice chairman of MCI Korea.

In the case of Suh Kap-Soo, chairman of the Korea Technology Investment Co., who was arrested Apr. 19, has disappointed the general public as much as the aforesaid two venture businessmen.

Chairman Suh was suspected of having embezzled more than 68.6 billion won earned by stock investment through forming an outside fund with company money and manipulated his firm`s stock prices with 13.4 billion won borrowed from financial institutions through a ghost company that he stood surety for.

Suh`s defense lawyer contended that the company chairman had not spent a single penny on himself but that 68.6 billion won in question had been formed by his own efforts. The attorney also asserted that Suh might have violated some law provisions but had no criminal intent for embezzlement. For instance, the lawyer noted, Suh borrowed 10 billion won from the company, but he did not use the money to pay back debt.

In actuality, Suh used 10 billion won borrowed from banks following his guaranteeing for the ghost firm for the investments in the KTIC.

It is up to the court to decide whether to accept the lawyer`s explanation. Yet the lawyer`s argument that Suh violated the law for the sake of his company is no more than old-fashioned rhetoric used by business tycoons whenever any financial scandals broke out, as in cases of the Hanbo, Kia and Daewoo scandals.

Merely in terms of his imitating the bad practices of the past conglomerates, Suh is open to harsh criticism. This is especially so because he imposed himself as the ``godfather`` of the newly emerging venture business in the country.

Shin Suk-Ho kyle@donga.com