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Samsung gets green light to rejoin FKI

Published: 18 Aug. 2023, 10:54 Updated: 18 Aug. 2023, 15:10

JIN EUN-SOO
[email protected]

Samsung Compliance Committee Chairman Lee Chan-hee answers reporters' questions at Samsung’s Seocho office on Friday where the committee’s meeting on Samsung rejoining the Federation of Korean Industries was discussed. [NEWS1]

Samsung’s compliance committee has conditionally consented to the company’s rejoining the Federation of Korean Industries (FKI).

“If Samsung decides to rejoin the organization, the committee recommends the company immediately withdraw when corruption related to the link between politics and businesses emerges, in order to prevent any damage to Samsung’s effort and willingness to abide with the law until now,” the committee said in a statement Friday.

“Whether to rejoin or not is up to Samsung’s board and management after sincerely looking into the circumstances.”

Five affiliates of Samsung – Samsung Electronics, Samsung SDI, Samsung Life, Samsung Fire & Marine Insurance and Samsung Securities – are expected to hold board meetings before Aug. 22 to discuss the rejoining agenda.

The tight schedule comes as the FKI is to hold an extraordinary general meeting on Aug. 22 to vote on the appointment of Ryu Jin, chairman of Poongsan Group, as its new chairman and the change of the organization’s Korean name.

The compliance committee showed concerns whether FKI can really pull off a thorough reform, cutting inappropriate link between political and business circles.

“The biggest agenda today was whether FKI can really cut the collusion between the politics and business,” said the committee’s chairman Lee Chan-hee to reporters after holding the second meeting regarding the agenda at Samsung's Seocho office.

“We recommended not only to immediately withdraw if the collusion continues but also to thoroughly review their plans on transparent management and accountings.”

Storied past

Fifteen of Samsung’s affiliates, including Samsung Electronics, withdrew from the FKI in 2017 when it was mired in a corruption scandal centered around former president Park Geun-hye.

At the time, FKI was slammed for being a go-between for the Blue House and Korean conglomerates, forcing businesses to make donations to culture and sports foundations that were later found to have been misappropriated and embezzled.

The foundation of the Samsung Compliance Committee derives from the scandal too. It was launched in 2020 comprising of seven members, six of whom are from outside of Samsung.

The Federation of Korean Industries office in Yeouido in western Seoul on Friday [NEWS1]

Major Korean companies including Samsung, LG, SK and Hyundai Motor all left the group.

The FKI, without rolling out significant activities since then, has been recently pushing for an overhaul as it vies to freshen up its reputation of being a corrupted lobbying group. It said it would merge with its affiliated think tank Korea Economic Research Institute and appointed Poongsan Group Chair Ryu as its new head.

“At the moment, we cannot be sure whether the FKI’s reformation plan is viable or whether the organization has strong determination to do so as it is only in the beginning stage,” the committee said. “We are not sure whether the FKI can really cut off the inappropriate link and be born anew.”

BY JIN EUN-SOO [[email protected]]