Frequent readers of this column will note my ongoing study and commentary on Korean Big Business. One dynamic of Korean business is the Love-Hate relationship between the Korean government and it major conglomerates. (By the way, this has been going on for twenty-five years.)
On one hand, Korea's global corporations are vital to South Korea's economic well-being. On the other hand, the structuring of Korean big business conflicts with South Korean government mandates for corporate transparency and open management.
Ironically, when a company complies with the government mandates it is more open for hostile takeover--such as the recent Carl Ichan-led move against Korean Tobacco and Ginseng.
Last year and into the first months of 2006, Samsung and its Chairman were target of government probes.
Now, the Hyundai-Kia Motor Group, Korea's second largest group, its Chairman, and 20 key executives are the subject of a massive probe.
Why such attacks on Korean Big Business...
Outside the need to police graft and payoffs ( often part of Korean business), Korean officials recognize that for South Korea to become a global trade hub, South Korean business must follow accepted global business norms and practices. For Korea to become a hug of trade its business practices must align with those of the West and are acceptable to foreign investment--even if it mean foreign takeovers of its large corporations.