Break-up of Restructuring Headquarters Should Be Decided By Companies

It has been reported that the President-elect Roh Moo-hyun made it clear that he would carry out business reforms or chaebol reforms in a “market-friendly” manner by ruling out wielding government`s power to implement chabol reforms. In addition, his government transition team is planning to gather broad opinions from the business community in the process of drawing up key policies.

The President-elect`s such move can be interpreted as an attempt to address rising concerns over chaebol reform in the Korean business circle.

Vice Chairman of the Presidential Transition Committee Kim Jyun-pyo held a press conference at the central building of the Millennium Democratic Party on Jan.8 in downtown, Seoul. In the press conference, he stressed, “Chaebol reform should be carried out in an autonomous, gradual, and long-term manner, and which of the position the President-elect is now standing on.” Mr.Kim was quoted as saying, “Leakage of unconfirmed and undecided polices related to corporate restructuring and spin-off of affiliated companies from parent companies to the press has made domestic and foreign investors confused.”

He followed by saying, “The President-elect thinks that most of the corporate restructuring issues require a possible revision of the Constitution and should not be carried out in a hasty manner. Regarding constitutional amendment front, he will present long-term visions and goals first and give the business circle enough time to be ready.”

The vice chairman of the transition team added, “The incoming government`s pursuit for a “market-friendly” way of implementing chaebol reform means that it will not seek a forceful way to do the task, like the outgoing government`s big deal plans which were carried out five years ago during the 1997-8 financial crisis.”

“Because corporate restructuring headquarters come in a variety of types and there is no way to apply legal restrictions on them, it is nonsense that the issue has become the subject of discussion. The issue should be determined by companies` autonomous decisions,” he noted when asked about the issue over closing corporate restructuring headquarters.

In addition, he made it clear, “The circulating rumor is not true that the incoming government`s polices for chaebol refom is taking aim at a specific chaebol group. Such a thing does not happen and will never in the future.”

Meanwhile, spokesman for the government transition team Jung Soon-kyun said, “We will be wide-open to broader opinions from the business circle in developing government`s polices. To discuss the plan for transforming the nation into the center of Northeast Asia, a forum is scheduled for Jan.14 with directors in charge of dealing with management strategies in large companies and researchers from private and state-run research institutions attending.”

Joong-Hyun Park sanjuck@donga.com