The Korea Herald


Lawmakers seek to grill chaebols

By Yeo Jun-suk

Published : Aug. 10, 2015 - 21:33

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Lawmakers are gearing up for a spotlight-filled audit session next month by calling in a number of high-flying figures to the stand, including the beleaguered Lotte Group leadership on the retail giant’s mysterious management structure.

Bipartisan panel members from the National Assembly’s National Policy Committee said Monday they would seek to subpoena the nation’s fifth-largest conglomerate’s founder Shin Kyuk-ho and his two sons ― Shin Dong-joo and Shin Dong-bin ― during the annual audit sessions tentatively scheduled from Sep. 4 to 23.

Other parliamentary committees, such as the Trade, Industry and Energy Committee, are also considering joining in questioning the conglomerate family to highlight the structural problem of Korea’s family-run conglomerate, otherwise known as “chaebol” in Korean.

Lotte Group Chairman Shin Dong-bin. (Yonhap) Lotte Group Chairman Shin Dong-bin. (Yonhap)

“We are trying to look into the chaebol’s management system and its mutual growth with the small and-medium-sized companies,” Rep. Hong Young-pyo of the main opposition New Politics Alliance for Democracy told The Korea Herald. He serves as a Trade, Industry and Energy Committee panel member.

Other high-profile figures likely to face calls from the Assembly include Lee Jae-yong, the heir apparent to Samsung Group and vice chairman of Samsung Electronics Co., and Cho Hyun-ah, former vice president of Korean Air and the eldest daughter of Korean Air Chairman Cho Yang-ho.

Members of the Health and Welfare Committee were reportedly set to discuss plans to demand testimony from Lee for the company-owned hospital Samsung Medical Center’s initial response to the Middle East respiratory syndrome that claimed 36 lives in Korea.

The Land Infrastructure and Transportation Committee is also reportedly contemplating a plan to ask Cho Hyun-ah to give testimony for her so-called “nut rage” incident. Cho was jailed for 143 days for assaulting crew members and disrupting the plane’s operation, citing bad in-flight service.

Other conglomerates, particularly those involved in shady transactions surrounding the so-called energy diplomacy pushed by former President Lee Myung-bak, are subject to the discussion for the subpoena lists among the committee’s panel members.

The most imminent target, nonetheless, appeared to be the Lotte family, as the rival parties vowed to find out whether there were any irregularities in the conglomerate’s governance structure, given the public’s uproar over the company’s escalating family feud reflecting deep-rooted nepotism and dubious management style.

“I think it is inevitable to call in the family members who own Lotte,” said NPAD lawmaker Rep. Kim Ki-sik who serves on the committee’s panel. “Shin Kyuk-ho may be too old to attend the hearing, but Shin Dong-bin should be included on the list (for subpoena)” said Kim.

Kim’s counterpart Rep. Kim Yong-tae of the ruling Saenuri Party partly echoed the demand, saying, “If there is a request from the NPAD, I am more than willing to consider it. I would make up my mind after the Fair Trade Commission finishes its investigation (into Lotte).”

Lotte Group has yet to come up with its course of action in response to the anticipated calls for parliamentary inspection. “We haven’t figured out our plans for the parliamentary audit,” a source for the Lotte Group, who declined to be identified, told The Korea Herald.

“We will be reviewing it later as we have full plates in dealing with the issue. We are currently focusing on apologizing to the public and responding to the government agencies’ requests. We plan to address these issues first and later discuss the (audit) issue,” said the source.

Critics cautioned that the showmanship of the parliamentary audit might overshadow the essence of the problem. The audit has often been blamed for being a forum that only gives lawmakers a chance to lash out at those who testify before the National Assembly, without addressing the issue at hand.

Shin Yul, a politics professor of Myongji University, said that simply grilling the family members who own Lotte Group would fail to address big issues surrounding Korea’s chaebol, such as the separation between corporate ownership and management.

“I don’t understand what exactly the lawmakers want to question,” said Shin Yul. “The assembly should focus on the chaebol’s structural issues. I suspect the inspection would be nothing but a political move to cover up negative public sentiment about granting pardons to convicted conglomerate owners,” he said.

By Yeo Jun-suk (