“The power of South Korea’s chaebols – huge, family-owned conglomerates that have helped transform one of the world’s poorest countries into Asia’s fourth-largest economy in just a couple of generations – became an issue in the recent national elections. The left-wing candidate Moon Jae-in threatened to curtail the ability of South Korea’s business dynasties to control empires such as Samsung, LG and Hyundai via complex shareholdings that accelerate the transfer of corporate wealth to their own pockets,” McNeill and Kirk report. “The eventual winner, Park Geun-Hye, began her campaign in similar vein but as polling day drew near appeared to step back from concrete proposals to tackle the chaebol. [In February] she was sworn in to office, and for South Korea’s elite many now believe it is business as usual.”
McNeill and Kirk report, “The big daddy of the chaebols is the Samsung Group which, riding high on the success of its iPhone and iPad rivals the Galaxy and the Galaxy Note, has a turnover almost twice that of its closest rival, LG. The company’s clout is apparent in the drive from the airport west of Seoul into the capital, where a dense grey lattice of concrete and glass stretches across the Han river. Samsung’s apartments and buildings dot the landscape; Samsung Town dominates the business district. The company runs the Samsung Everland Theme Park, one of the world’s biggest, the Samsung Museum of Art and many other cultural attractions. Millions of citizens own Samsung’s smartphones and electronic products.”
“So important is Samsung to South Korea’s economy that it has literally become too big to fail. Its subsidiaries build a large share of the country’s infrastructure, from bridges to apartment blocks. The company accounts for 13 per cent of the country’s entire exports and a fifth of its GDP, according to analysts,” McNeill and Kirk report. “For years critics have looked nervously on this growing empire, saying its money and vast influence was helping to corrode the nation’s hard-won democratic institutions. A series of scandals in the last decade led to the conviction of several Samsung executives for bribing politicians. In 2008 Lee Kun-Hee – Korea’s richest man – was forced to quit as group chairman and fined $100m after being convicted of tax evasion and breach of trust following an investigation sparked by the wiretaps. But a year later the country’s pro-business president Lee Myung-bak controversially pardoned him. Samsung’s leader took full responsibility for the shame caused by the investigation, but denied wrongdoing. ‘I didn’t do it. I never thought it [Samsung Group] was a criminal organisation, and I think it is [the media’s] fault to define it that way,’ said Mr Lee, who has since returned to Samsung Electronics as chairman.”
Much, much more in the full article here.