After the Federation of Korean Industries General Assembly... Attention on Membership Fee Payments and Fund Contributions by the 4 Major Groups, and Advisor Kim Byung-joon's Activity Status

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On the 22nd, the Federation of Korean Industries (FKI) will hold an extraordinary general meeting to undergo a major transformation through the election of a new chairman and organizational restructuring. The FKI, which suffered a difficult period after losing its four major member groups (Samsung, SK, Hyundai Motor, LG) due to the political scandal and was excluded from major events during the Moon Jae-in administration, accepting criticism that the hardships were due to collusion between politics and business, will declare a strong will for organizational reform. Even after the general meeting, there are pending issues such as whether the four major groups will rejoin, responses related to membership fee payments and fund contributions, and approval of Acting Chairman Kim Byung-joon's advisory position.

On the 22nd, before the general meeting, the FKI is closely watching whether the Samsung Compliance Committee (Compliance Committee) will approve Samsung's rejoining. At the general meeting, the FKI plans to approve the absorption and integration of the Korea Economic Research Institute (KERI) under its umbrella, rename the organization to the Korea Economic Association (KEA), appoint Ryu Jin as the 39th chairman, and transfer the membership list of 16 affiliates of the four major groups to KERI if they rejoin. It has not yet been decided whether to approve a full-time vice chairman on the day or to proceed with the nomination process for Chairman Ryu Jin after the general meeting.

Lee Chan-hee, Chairman of Samsung Compliance Committee, is answering questions from the press before attending the temporary meeting of the Compliance Committee held at Samsung Life Seocho Building in Seocho-gu, Seoul on the 18th. Photo by Kang Jin-hyung aymsdream@

The most notable issues are the rejoining of the four major groups and their 'conditions,' the approval of Acting Chairman Kim's advisory position, and future trends. Inside the FKI, attention is focused not only on whether the Samsung Compliance Committee will approve Samsung's rejoining, which is a turning point for the four major groups, but also on the conditions the Compliance Committee will set for rejoining. The business community believes that even if the four major groups join the KEA, they will not be proactive in paying membership fees, contributing to the Korea-Japan Future Fund worth 2 billion KRW (with Korea's side bearing 1 billion KRW), which was jointly established by the FKI and Japan's Keidanren, or joining the group of chairmen. The atmosphere among the four major groups is similar. In this situation, the FKI is interested in whether the Compliance Committee will set conditions such as 'membership fees and fund contributions must be approved by the Compliance Committee' or 'do not pay any membership fees or contribute to the fund at all.' The Compliance Committee's policy is expected to significantly influence not only Samsung but also the rejoining and activity levels of other groups such as SK, Hyundai Motor, and LG. Before the four major groups withdrew in 2015, the FKI's membership fees were around 50 billion KRW, with the four major groups accounting for more than half. At that time, Samsung reportedly paid about 10 billion KRW, and SK, Hyundai Motor, and LG paid about 5 billion KRW each.

Unlike the Business Support Task Force (TF) led by Samsung Electronics Vice Chairman Chung Hyun-ho, the Compliance Committee is an organization with less political burden. In principle, it may advise the FKI not to pay unnecessary money to eradicate collusion between politics and business. Chairman Lee Chan-hee has also been making strong remarks daily. At the extraordinary meeting on the 16th, he said, "(Samsung's rejoining of the FKI) is a matter of whether Samsung can firmly break the chain of collusion between politics and business." At the regular meeting on the 18th of last month, he said, "A firm, Copernican revolution in thinking is needed from both political power and the FKI itself." It was also reported that opinions among the seven Compliance Committee members are divided.

Kim Byung-joon, Acting Chairman of the Federation of Korean Industries.

Whether the FKI chairman group will approve appointing Acting Chairman Kim as an advisor is also a matter of interest. If Kim, who is close to President Yoon Suk-yeol, influences the chairman group's decision-making as an advisor, criticism related to collusion between politics and business may arise, and public opinion could worsen. Although the FKI says it has not decided whether to approve Kim's advisory appointment on the 22nd, the business community largely expects approval at the general meeting. Kim said in May, "Even after my term ends, I will advise and cooperate to ensure reforms are implemented and play a role if necessary." The FKI has a precedent of appointing former full-time vice chairmen as advisors. Former FKI Vice Chairman Jung Byung-chul, a former president of LG Electronics, served as an advisor for two years starting in 2013.

Practical matters such as organizational name changes and appointing the next head of KERI also need to be resolved. The organizational name change requires approval from the Ministry of Trade, Industry and Energy after the general meeting on the 22nd. This process may take up to about a month. The head of the research-related organization of KEA will be decided later by the FKI secretariat. The FKI secretariat is composed of four divisions: management planning, international affairs, CSR, and economic industry, while KERI is a separate legal entity. If KERI is absorbed and integrated into KEA, the head of KERI will become the head of an organization within KEA. If the FKI secretariat's organizational system is inherited, the next KERI head may be demoted to head of KEA's Economic Industry Division. An FKI official said, "The next head of KERI is not an urgent matter compared to other issues such as the rejoining of the four major groups."

The FKI dismissed rumors from some in the business community about a re-election of the 40th chairman in February next year. The position is that Ryu Jin, who will be appointed on the 22nd, will serve at least until August 2025. The FKI holds only one regular general meeting every February; in February this year, Acting Chairman Kim was appointed to the vacant chairman position, and since his term ends in August, an extraordinary general meeting was specially convened. Therefore, even if the 39th Chairman Ryu Jin's term expires in August 2025, it must be decided whether he will serve an additional six months according to tradition to align with the regular general meeting schedule in February 2026, end his term in August 2025, or be reappointed. An FKI official said, "This matter is expected to be decided around the regular general meeting in February 2025," adding, "Chairman Ryu Jin will serve a two-year term."

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