Saenuri Party presidential candidate Park Geun-hye pledged Friday to promote fair competition by protecting the economically weak, stopping large conglomerates’ exploitation of power and reinforcing consumer protection.

“I will turn the conglomerate-centered economic structure to a satisfying economic system where small and mid-sized businesses and consumers can grow together through fair and transparent market order, equal opportunities and reasonable rewards,” Park said at a news conference at the party’s office in Yeouido.

Her plans, however, were noticeably void of some symbolic chaebol reform measures such as penalization of existing circular shareholdings, thereby inviting criticism from opponents that her economic democratization drive has lost steam.

Park’s version of economic democratization focusing on “fair market” rather than “chaebol reform” showed her intention to stand out against her progressive rivals Moon Jae-in of the Democratic United Party and independent Ahn Cheol-soo.

While the three share common ground on toughening up on conglomerates’ unfair practices and irregularities, Moon and Ahn suggest stronger reforms for chaebols such as by putting an investment ceiling on the top 10 conglomerates (Moon) and setting up a presidential chaebol reform committee (Ahn).

Missing at the press conference was Kim Chong-in, Park’s top economic brain and an advocate of economic democratization, suggesting a fissure between the two. They had openly butted heads in the past week over some sensitive chaebol reform ideas pushed by Kim, many of which Park rejected.

Kim had proposed consolidating the different regulations on chaebol currently stipulated in 12 different pieces of legislation, restricting voting rights on existing circular shareholdings, and referring all cases involving conglomerate owners to a jury. All had been vehemently opposed by the business circles.

Park instead said she would consider consolidating the chaebol-related laws on a long-term basis as they may collide with the existing legal code, while applying additional revisions to other relevant laws.

Restricting voting rights of existing circular shareholdings may expose Korean companies to hostile takeover attempts by foreign businesses, or throw the companies into confusion over a practice that was legitimate at the time, she said.

Park added that obligating jury trials for chaebols might infringe upon the right to equality and that, instead, penalties for economic crimes would be fortified.

Park’s 35 economic democratization measures divided into five major categories were aimed at fostering growth of small and medium enterprises and restraining abuses of power by large family-owned businesses, while maximizing their positive roles of fueling growth and creating jobs.

“Large conglomerates must boldly withdraw themselves from threatening the small-scale and traditional merchants, and make self-sacrifices,” Park said.

Park pledged to remove discrimination between regular and irregular workers, limit conglomerates’ advances into areas better fit for smaller businesses, and curb large retailers’ abuse of power against smaller suppliers.

Stricter penalties with jail sentences would be applied to chaebol owners on embezzlement or malpractice charges, and their presidential pardons limited.

Family-owned businesses making favored orders to their affiliates would be curbed and any unfairly earned profits would face restitution, she said.

The rights of consumers would be reinforced by revamping the Fair Trade Act, while the Fair Trade Commission’s exclusive right to report conglomerates would be expanded to other agencies. The consumer damage relief system would be expanded to promote swifter voluntary compensation measures by companies, while a punitive damage system would be introduced and class action lawsuits, currently only allowed in the securities sector, expanded, she said.

Park will also allow cumulative voting to protect the rights of minority shareholders, ban new cross-shareholdings, and enable various institutional investors like state pension funds to enjoy more voting rights over companies they have invested in.

The separation of industrial and financial capitals would be widened by restricting the voting rights held by financial or insurance affiliates for their shares in non-financial affiliates, while industrial capital would face limits in acquiring shares at banks.

The DUP, meanwhile, criticized Park’s announcement of measures as “an excuse to discard the economic democratization pledge.”

“Park’s announcement of pledges were filled with logic defending the large conglomerates opposing economic democratization. … The unsubstantial pledges show that Park has no intention to realize economic democratization,” said DUP spokeswoman Rep. Kim Hyun.

By Lee Joo-hee (jhl@heraldcorp.com)