LG and SK Also Positively Considering Membership Fee Payment... Can Hankyung Association Regain Status After 7 Years?

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LG and SK, two of the major four conglomerates in South Korea, are positively considering paying membership fees to the Korea Economic Association, drawing attention from the business community on whether this will lead to actual payment.

Korea Economic Association, Yeouido, Seoul. Photo by Jinhyung Kang aymsdream@

According to multiple business insiders on the 2nd, LG and SK are currently reviewing and undergoing approval procedures internally regarding the 3.5 billion KRW membership fee requested by the Korea Economic Association. There is also speculation that one of the two groups might pay the fee as early as this month. If the fee is paid, it will be the second among the four major groups to do so, following Hyundai Motor, which paid its membership fee earlier last month.

SK is expected to reach a conclusion slightly earlier. SK has completed board reports on membership fee payments for each affiliate and is reportedly discussing the selection of affiliates to pay and the payment methods. LG’s external cooperation department is handling the related tasks. A positive atmosphere toward payment is sensed within LG. An insider familiar with the group’s situation said, "I understand that the groups generally share a consensus on paying the Korea Economic Association membership fee," adding, "While the timing may differ, it is expected that all four major groups will eventually pay the fee."

Large corporations represented by Samsung, SK, Hyundai Motor, and LG withdrew from the National Federation of Business Associations, the predecessor of the Korea Economic Association, between late 2016 and early 2017 amid the ‘state affairs manipulation’ scandal. If three of these four major groups pay their membership fees first and resume their membership activities, the Korea Economic Association’s representativeness within the business community is expected to be further strengthened. Should all four major groups pay their fees and resume membership activities, the Korea Economic Association could restore its status as the largest economic organization after seven years.

However, Samsung is expected to take a bit more time to pay the membership fee. Unlike other groups, Samsung requires internal procedures such as passing through the Compliance Committee, which acts as a kind of ‘red team’ (a team that identifies weaknesses within the organization, raises issues, and resolves them). Among key executives, there is a strong awareness that, due to the internal monitoring function being virtually paralyzed during the state affairs manipulation scandal, the decision on whether to pay the Korea Economic Association membership fee must go through a more cautious and transparent process.

On the 22nd of last month, the Compliance Committee met with CEOs of seven Samsung affiliates, including Samsung Electronics Vice Chairman Han Jong-hee and Samsung SDI President Choi Yoon-ho, to discuss the membership fee payment but did not reach a conclusion. Compliance Committee Chairman Lee Chan-hee said, "There were fundamental questions from committee members about whether the Korea Economic Association has undergone personnel reforms that can break the chain of collusion between politics and business," adding, "This will be discussed again later."

Meanwhile, the Korea Economic Association has been striving to expand its scope this year. In February, POSCO Holdings, Amorepacific, KG Mobility, EcoPro, and Maeil Dairies joined as new members. Currently, the Korea Economic Association reportedly has about 420 member companies. Major domestic IT and entertainment companies such as Naver, Kakao, and HYBE have also been exploring membership for a long time, suggesting that the number of member companies may increase further in the future.

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