FTC Chairman Kang Chul-kyu Meets With Samsung Chairman Lee Kun-hee

Fair Trade Commission (FTC) Chairman Kang Chul-kyu asked Samsung Group Chairman Lee Kun-hee to cooperate for improving the structure of corporate governance on June 14.

Concerning this, Lee said that he would put efforts into improving the structure of corporate governance and there would be no more improper collusive ties between political power and business people.

Kang, who has had a series of meetings with the four top Chaebol owners, met with Lee at the Shilla Hotel in Jung-gu, Seoul on the afternoon of that day and exchanged opinions regarding the government’s policies on Chaebol.

At the meeting, which lasted two hours, Kang said that Samsung has high efficiency in production but that it needs to conform to the principle that it should not harm minority shareholders, consumers, and rival companies. In addition, he pointed out that Samsung should not try to lower unit costs of delivered goods, which makes suppliers bear the expense.

Concerning this, Lee acknowledged the company’s wrongdoing and revealed his intention to exert himself in the government’s effort to resuscitate the economy.

In regard to relaxation of regulation, Kang said: “For example, a profit-making corporation cannot build a school or a hospital, but we will permit it,” and Lee said, “A profit-making corporation should be allowed to run a hospital.”

In addition, Kang explained the point of the “three-year road map for market reform” and the revised bill for fair trade law, and he asked for Lee’s understanding and cooperation.

After the meeting with Lee, Kang met with journalists and said, “Lee revealed his intention to accept restricting the voting rights of its financial subsidiaries.”

However, to the question asking whether they discussed the restricting of voting rights of financial subsidiaries, Lee answered, “No,” and when he was asked to assess the road map for market reform, he said, “I have no idea.”

Lee said to the journalists that they talked about their worries about the economy and that they agreed on the point that the economy can be resuscitated when small and medium-sized enterprises, credit delinquents, and the poor make their way.

At the meeting of that day, Lee Hak-soo, head of Samsung’s restructuring office, sat with Lee Kun-hee, and Kang Dae-hyung, a FTC executive officer, sat with Kang Chul-kyu.

FTC Chairman Kang finished a series of meetings with the four top Chaebol owners, the last of which was the meeting with Lee that day.

Chi-Young Shin Won-Jae Lee higgledy@donga.com wjlee@donga.com