Samsung Compliance Monitoring Committee Interim Meeting... Discussion on Rejoining the Federation of Korean Industries

Discussion on Managing Collusion Risks Expected Before Federation of Korean Industries Temporary Meeting on the 22nd

The temporary meeting of the Samsung Compliance Committee (Compliance Committee), which is likely to serve as a turning point for Samsung's decision to rejoin the Federation of Korean Industries (FKI), will be held on the 16th. The Compliance Committee will hold the temporary meeting at the Samsung Life Seocho building to discuss legal risks and other issues related to the rejoining of five affiliates?Samsung Electronics, Samsung SDI, Samsung Life Insurance, Samsung Fire & Marine Insurance, and Samsung Securities?to the FKI. These five affiliates are members of the Korea Economic Research Institute (KERI) under the FKI.

The regular meetings of the Samsung Compliance Committee are held on the third Tuesday of every month. Since the previous day, the third Tuesday of August, was Liberation Day, the regular meeting was postponed to the 22nd. However, the Compliance Committee held a separate temporary meeting, attracting significant attention from the business community. The 22nd is the date of the FKI’s temporary general meeting, so it is speculated that the temporary meeting was held beforehand on the premise of rejoining. At the temporary general meeting on the 22nd, the FKI plans to absorb and integrate KERI under its umbrella, reorganize the organization into the Korea Economic Federation (KEF), change its name, and handle the agenda for appointing a new chairman.

Lee Chan-hee, Chairman of the Samsung Compliance Committee (second from the left), and other committee members attending the "Samsung Compliance Committee 2nd Term First Regular Meeting" at Samsung Life Seocho Tower in Seocho-gu, Seoul. Photo by Kang Jin-hyung aymsdream@

For Samsung to rejoin the FKI, the boards of directors of the five affiliates belonging to KERI must meet before the FKI’s temporary general meeting. The business community believes that the decision to rejoin will not be made by a vote of the Compliance Committee members but will likely proceed in a way where Samsung Group effectively decides and asks the Compliance Committee if there are any objections. Samsung withdrew from the FKI amid the political scandal but maintained its membership in KERI. After the FKI changes its name to KEF and absorbs and integrates KERI at the temporary general meeting, transferring the membership list, Samsung can rejoin KEF. The boards of Samsung affiliates are expected to meet before the FKI’s temporary general meeting. Samsung’s five affiliates’ Chief Financial Officers (CFOs) held three meetings and reported to each company’s Chief Executive Officer (CEO), agreeing to dissolve KERI. Automatic succession of KERI membership will be decided after discussions by the boards and the Compliance Committee.

The decision on Samsung’s rejoining is expected to have a decisive impact on the rejoining of other major groups such as SK, Hyundai Motor, and LG Group. On the 28th of last month, Kim Byung-joon, acting chairman of the FKI, stated that “there is no set deadline for the (four major groups’ rejoining),” leading to opinions that it might be difficult in August. However, the atmosphere changed with the holding of the Samsung Compliance Committee’s temporary meeting on this day.

For the four major groups to return to the FKI, all affiliates of Samsung’s five KERI member companies, SK (SK Inc., SK Innovation, SK Telecom, SK Networks), Hyundai Motor (Hyundai Motor, Kia, Hyundai Construction, Hyundai Mobis, Hyundai Steel), and LG (LG Corp., LG Electronics) must decide to rejoin before the FKI’s temporary general meeting. Recently, there have also been talks that POSCO Group is considering rejoining the FKI.

Within Samsung, it is said that the seven Compliance Committee members, including Chairman Lee Chan-hee, may set a condition that the Compliance Committee’s approval must be obtained when making additional contributions, such as the 2 billion won Korea-Japan Future Fund (1 billion won from the Korean side) jointly established by the FKI and Japan’s Keidanren, as a prerequisite for rejoining. A Compliance Committee official said, “It is difficult to confirm the specific agenda of the temporary meeting.”

This content was produced with the assistance of AI translation services.