Consideration of Closuring Corporate Restructuring Headquarters

The presidential transition team has decided to consider shutting down conglomerates` corporate restructuring headquarters, which it sees focusing on company heredity job as a secretary`s office.

The response from the business world is likely to draw attention in that the decision could mean either a total change of the head offices for restructuring or a closure.

On Jan. 2 a senior official with the transition team told reporters that the corporate restructuring headquarters in chaebol are playing the role of a secretary`s office, which existed before a financial crisis hit the nation in 1997 and that the team would decide whether the offices should be in place after taking a close analysis on their functions and roles.

He added, "Our transition committee has decided to do so because we don`t know what roles they played and there has been no evaluation on whether they completed their role of corporate restructuring."

Though the official acknowledged that whether to continue such offices depends on companies, he charged that these offices worked as a planning and coordination office or a chairman`s office for heads of the nation`s large business groups and they often took the lead in a second-generation group owner`s unfair takeover of the group`s wealth.

"Even if a good system is in place, it is a big problem, when such head offices use loopholes to lead illegal transfer of wealth to the second generation," he continued. "President-elect Roh`s willingness to introduce the so-called `all-inclusive` taxation system to prevent business leaders from evading taxes through inheritance and donation is in line with his position not to allow foul play of corporate restructuring headquarters."

Six groups such as Samsung, LG, SK, and Hyundai Motors are operating such offices, which were made by the business groups when the incumbent government asked for abolition of a secretary`s office. They were like command offices for corporate restructuring.

However, as the Kim Dae-jung government`s term enters its last phase, such offices started to increase their roles. As a result, they have gotten supervisions from the Fair Trade Commission. But this is the first time that the idea of closing such offices were raised.

Young-Hae Choi yhchoi65@donga.com