Samsung, Federation of Korean Industries Practically Return... Jun-Gam Committee Recommends "Withdrawal if Collusion Occurs"

Countdown to Return to the Top 4 Groups After 6 Years
EcoPro and POSCO Also Pushing to Join

On the 18th, the Samsung Compliance Committee decided to approve Samsung's rejoining of the Federation of Korean Industries (FKI). On the 22nd, FKI will hold an extraordinary general meeting to elect a new chairman and approve organizational restructuring agendas. Following the Compliance Committee's approval, five Samsung affiliates that are members of the Korea Economic Research Institute (KERI) under FKI (Samsung Electronics, Samsung SDI, Samsung Life Insurance, Samsung Fire & Marine Insurance, Samsung Securities) are expected to pass the agenda for joining FKI after holding an extraordinary board meeting.

Lee Chan-hee, chairman of the Samsung Compliance Committee, told reporters after the second extraordinary meeting held at Samsung Life Insurance Seocho Building in Seocho-gu, Seoul, "If the collusion between politics and business within FKI continues after joining, we recommended immediate withdrawal and thorough review of measures to ensure transparency in organization operation and accounting before deciding on rejoining at the board meeting." When asked if this meant conditional approval of rejoining, he said, "I believe the company's board and management will make a specific judgment on that."

Lee Chan-hee, Chairman of Samsung Compliance Monitoring Committee, is moving to attend the temporary meeting of the Compliance Monitoring Committee held at Samsung Life Seocho Building in Seocho-gu, Seoul on the 18th. Photo by Kang Jin-hyung aymsdream@

Although the board meetings of the five Samsung affiliates remain, the business community interprets that the rejoining process for Samsung is virtually complete with the Compliance Committee's approval. Other major groups such as SK, Hyundai Motor, and LG are also expected to proceed with rejoining. This marks the return of the four major groups to FKI after six years.

It is reported that there was a heated debate on 'eradication of collusion between politics and business' during the Compliance Committee meeting. Discussions included not only legal risks but also the extent to which the execution of membership fees related to FKI projects would be controlled even after rejoining. The Compliance Committee reportedly imposed conditions requiring approval for payment of membership fees and fund contributions.

This Compliance Committee policy is expected to have a significant impact not only on Samsung but also on other groups. Before the four major groups withdrew in 2015, FKI membership fees amounted to about 50 billion KRW, with more than half contributed by the four major groups. At that time, Samsung paid about 10 billion KRW, while SK, Hyundai Motor, and LG each paid around 5 billion KRW.

With the Compliance Committee's approval on this day, the five Samsung affiliates that are KERI members are expected to hold extraordinary board meetings on the 21st or 22nd. In the case of Samsung Electronics, notice must be given to 11 internal and external directors at least 24 hours before convening the extraordinary board meeting. This allows the board to decide on rejoining before the FKI general meeting on the 22nd.

At the FKI general meeting, agendas such as the absorption and integration of KERI and renaming the organization to the Korea Business Association (KBA), the appointment of Ryu Jin as the 39th chairman, and the transfer of the membership list of 16 affiliates from the four major groups to KERI upon their rejoining are expected to be approved. It has not yet been decided whether to approve the full-time vice chairman on the day or to proceed with the nomination process for Chairman Ryu after the general meeting.

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

Along with the rejoining of the four major groups, attention is also focused on whether the chairman group will appoint Kim Byung-joon, the current acting chairman of FKI, as an advisor after the general meeting. The business community believes there is a high possibility that Kim will be appointed as an advisor and that this could be decided at the general meeting on the 22nd. Kim said in May, "Even after my term ends, I will provide advice and cooperation to ensure reforms are implemented and will play a role if necessary."

Meanwhile, the day before, secondary battery company EcoPro applied to join FKI. EcoPro is the second-largest company on KOSDAQ by market capitalization (29.5 trillion KRW). Its total assets also exceed 5 trillion KRW, placing it on this year's list of publicly disclosed business groups by the Fair Trade Commission. POSCO Group is also preparing to submit an application for membership. From FKI's perspective, it is a double celebration as former members are returning and new members are joining.

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