Chaebol chairmen, public donation gesture for ‘exoneration purposes’ … once exonerated, they procrastinate

Disclaimer: The following is a totally unauthoritative personal translation of an article appeared in <The Kyunghyang Shinmun%gt; on Feb. 2, 2012, reporting two faces of Korean chaebol chairmen on public donation: on numerous occasions, when things concerning their illegal activities broke out, they made public pledges to donate their private properties to public but, when courts ruled in favor of them, they procrastinated on them. Being unable to find ‘nobles oblige’ among chaebol chairmen, Koreans are more weary of economic system dominated by chaebol conglomerates and start to demand more of economic democracy recently. All rights regarding this post stay with the author of the original article or with <The Kyunghyang Shinmun%gt; and this post will be scrapped immediately at their request. In the post, I tried to match the English translation of names of people / institutions / positions to their authentic ones as much as I can but, inevitably, some of them may be different. Original article of this post (in Korean) can be found in the link at the bottom.

Reporter Cheol-woong Park 박철응 기자 hero@kyunghyang.com

Koreans have mixed feelings about astronomical donations by foreign wealths like Bill Gates, the founder of Microsoft, or Warren Buffett, the chairman of Berkshire Hathaway Inc., because they see totally different demeanor in Korean chaebols.

When Kun-hee Lee, the chairman of Samsung, retired from Samsung chairmanship with an announcement in Apr. 2008, he pledged he would make use of those shares under fake names for ‘useful purposes’. In three months, he begged for favors and showed tears in the courtroom imploring how hard it had been to make a company world number 1. After all, chairman Lee was pardoned through a special presidential exoneration in Dec. 2009 and returned to Samsung in Mar. the next year.

However, his pledge of returning shares under fake names whose market price is estimated to be 1.4 trillion KRW to society has not been fulfilled yet even after three years and nine months by now. It has been known that Samsung Economy Institute Social Contribution Study Team that was established last year is investigating the issue but the Social Contribution Study Team itself claims that the issue is not part of their missions. Mr. Hyeon-am Shin, the manager of Social Contribution Study Team, said “We are not endowed with any mission regarding chairman Lee’s shares. We are just studying foreign examples to make better social contributions at the level of Samsung conglomerate as a whole.”

An official from Samsung conglomerate said “as far as I know, chairman Kun-hee Lee considers the issue seriously in a variety of ways and listens to opinions from diverse sources.” But Samsung does not have any official organization, at the whole conglomerate level, that prepares for the issue of public donation of chairman Lee’s private shares.

When a secret money scandal broke out in 2006, Hyundai Motors chairman Mong-koo Chung also pledged, with a public apology, to return his private property amounting to 1 trillion KRW to society without any condition.

Chairman Chung donated his private property worth 150 billion KRW in three separate times to a social contribution cultural foundation Haevichi that he had established himself and announced that he would donate his own shares of Glovis Co., Ltd, amounting to 500 billion KRW in Aug. last year. By this, he became the most donated person in Korea by providing 650 billion KRW to public funds.

However, some of Hayundai Motors group money is, in fact, melt in the value of Glovis shares since Glovis grew explosively by monopolizing the business among sibling companies of Hyundai Motors group.

Former leader of Grand National Party Mong-joon Chung also donated private fund amounting to 200 billion KRW to Hyundai Asan Sharing Foundation in Aug. last year, but it is viewed to have been motivated by his political aspiration of presidential bid.

Lawyer Young-hee Kim , the deputy director of Solidarity for Economic Reform, criticized “private donations by chaebol chairmen have been utilized as a way to pull beneficial sentences from the court for their criminal activities. Hyundai, anyhow, actually chipped in the pledged money but the chairman Kun-hee Lee even has never tipped anything about his promise for years.” Deputy director Kim also said “If he contributed his pledged money immediately, only the interest that would have accrued during that time can be more than 100 billion KRW by now. Considering the revelation that secretary’s office of Samsung group had been managing chairman Lee Kun-hee’s money and the image of chairman Lee is in fact the image of Samsung, it is also irresponsible for the company to simply maintain everything none of their business.”

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