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3M, Homeplus named worst performers in vendor relationships

[THE INVESTOR] A total of 21 big firms, including troubled local discount chain Homeplus and 3M Korea received the lowest grades in an independent survey that measured their efforts in pursuing mutual growth with their subcontractors last year.

The worst performers also include Daewoo Shipbuilding & Marine Engineering, Kumho Petrochemical, Booyoung Group’s construction arm and Seoul Semiconductor, according to the Korea Commission for Corporate Partnership, an independent watchdog on corporate activities on June 30. 


3M CEO Inge Thulin
3M CEO Inge Thulin

Under the law, the commission publishes an annual mutual growth index that quantifies efforts by South Korean firms made to promote mutual growth with their vendors. The commission sent out questionnaires to CEOs and other executives of 149 large companies and their 19,295 vendor firms from October to May.

Meanwhile, a group of 25 companies receiving the highest scores included Yuhan Kimberly, Coway, CJ, Samsung Electronics, LG Electronics. POSCO, Hyundai Motor, Kia Motors, SK Telecom, KT and Hyundai Mipo Dockyard were also on the list.

Samsung Electronics has held the top spot for five years, while SK Telecom and SK Global Chemical has kept their mutual partnership level high for four years. Hyundai Motor, Kia Motors and Coway have been listed in the group for three years.

The index is currently divided into four levels -- highest, high, good and average -- with the average level being the lowest. From next year, the commission will create an even lower level to degrade the companies frequently involved in social issues or unfair business practices.

“We will create a fifth level -- poor level -- next year and immediately degrade companies that violate laws,” said KCCP chairman Ahn Choong-yong.

The commission said it would toughen the index standard next year to better root out unfair business practices being rampant between large and small companies.

Homeplus was the only retail company to get the lowest score.

Last month, the discount chain was slapped with a fine of 22 billion won ($19.1 million) by the Fair Trade Commission last month for the violation of the Retail Business Act. Homeplus’ fine was the largest, exceeding E-mart’s 1 billion won and Lotte Mart’s 8 billion won, as the retailer refused to carry out corrective orders issued by the antitrust agency.

DSME, for its part, has been involved in a series of corruption and embezzlement issues of late.

Former head Nam Sang-tae was arrested Wednesday for taking money after unfairly supporting a promotion agency. Earlier this month, another employee surnamed Lim was also arrested for illegally pocketing 18 billion won from the company’s funds.

The commission’s spokesperson said it would continue to improve the index‘s objectively, its effectiveness and the acceptability of the companies for the spread of mutual growth in the entire society.

By Shin Ji-hye (shinjh@heraldcorp.com)

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