This file photo, dated Dec. 19, 2011, shows SK Group Chairman Chey Tae-won surrounded by reporters as he enters the Seoul Central District Prosecutors’ Office to be grilled over allegations that he embezzled a massive amount of group funds in collusion with his younger brother. Chey was included in the list of special pardons that President Park Geun-hye granted to high-profile businessmen and more than 6,500 people on Aug. 13, 2015. The pardons are part of celebrations to mark the 70th anniversary on Aug. 15 of Korea’s independence from Japan’s 1910-45 colonial rule. (Yonhap)
It is going to be interesting to see if this law gets passed:
In this Tuesday, Dec. 30, 2014 photo, Cho Hyun-ah, center, former vice president of Korean Air Lines, is escorted by court officials as she leaves for Seoul Western District Prosecutors Office at the Seoul Western District Court Office in Seoul, South Korea. A Seoul court is expected to decide Tuesday whether to issue an arrest warrant for Cho, who resigned as vice president at the airline earlier this month amid mounting public criticism over the incident that she forced a flight to return over a bag of macadamia nuts and a current executive for attempts to cover up the “nut rage” case. (AP Photo/Ahn Young-joon)
Resentment has mounted so much in South Korea against what has come to be known as “gabjil”, high-handedness by the rich and powerful, that parliamentarians are proposing legislation to punish some of the worst abuses.
A bill to be presented in the national assembly this month is formally called the “Conglomerates Ethical Management Special Law” but has been nick-named the Cho Hyun-ah law.
Cho, also known as Heather Cho, is the daughter of the chairman of Korean Air Lines and was sentenced last week to a year in prison for an outburst on a Korean Air plane while on the ground in New York. It was considered a severe sentence by some legal experts.
The bill proposes to ban members of the powerful business families known as chaebol from working at their companies for at least five years if convicted of a crime. In earlier cases, some high-profile offenders were pardoned, serving little or no jail time, although recently-convicted chaebol executives have found it harder to avoid prison. [Reuters]
You can read more at the link, but I wonder if it is even Constitutional in Korea to make special laws that focus on particular individual families?
Here is an interesting article from Bloomberg that explains why the Korean media does not actively investigate chaebol and when major incidents do happen they are quick to forget about them:
Cho Hyun-ah, Korean Air’s vice president responsible for cabin service, and the oldest child of Korean Air chairman Cho Yang-ho, answers question in Incheon, South Korea in September 2014. Yonhap/AP
It’s the rare scandal that links air rage, corruption and the fate of the world’s 14th biggest economy. The Cho Hyun-ah kerfuffle dominating South Korean news media offers all this and perhaps more: a chance to right a political system that’s veered off course.
The news media pounced on the delicious tale of Cho’s freakout, on a Dec. 5 New York-to-Seoul flight, over the manner in which she was served her macadamia nuts. Cho figured her status as daughter of Korean Air’s chairman entitled her to demand that Flight 86 return to the gate to toss off a crew member who didn’t pay her sufficient homage. The 40-year-old has since been indicted for obstructing aviation safety (she’s also being investigated for colluding with transportation officials).
News commentators are now slamming the sense of privilege felt by families running Korea’s corporate giants, or chaebol. Indeed, Cho’s tantrum demonstrated, in a nutshell, how nepotism and clubby ties between government and industry hold back the economy.
But why did it take Cho’s nut-rage to get reporters on the case? Something similar happened last April with the sinking of the Sewol, in which more than 300 people (most of them school kids) died. The ferry was operated by chaebol Chonghaejin Marine, a fact that was harnessed to explore how cronyism and the revolving-door between regulators, bureaucrats and the private sector put lives at risk. This fit a disturbing pattern. When a spectacular incident makes global headlines, journalists feel compelled to investigate Korea’s chaebol problem. When the dust settles, they move on. Rather than respond only to periodic public outrage, journalists should keep a steady watch on the issue.
Two years ago, Park Geun-hye rode a wave of discontent into South Korea’s presidential Blue House. Many blame the widening gap between rich and poor on the dominance of the chaebol, with their unseemly penchant for tax-evasion, sibling battles over assets and extreme concentration of national wealth. Just five companies generate roughly two-thirds of South Korea’s gross domestic product. This outsized influence stifles small-and- medium-size companies. It kills any chance a startup might have to introduce game-changing products and create new jobs. Park’s plan to rein in the chaebol is off to a slow start, and media elites share in the blame.
The chaebol are major advertisers with deep pockets and, like Japan’s vast power industry or America’s military- industrial complex, they are adept at using their brawn to muzzle criticism. In his explosive 2010 book “Think Samsung,” that company’s former in-house counsel Kim Yong-chul detailed how family-owned conglomerates allegedly used bribes and intimidation to “lord over” the government and the media. Kim says that when he first approached local news outlets with the story, he found no takers. [Bloomberg]
You can read the rest at the link, but I think with the rise of alternative media it is getting harder for the chaebol to cover up their transgressions. With that said I would be surprised to see anything change anytime soon.
