Samsung Subcommittee on Fair Trade Commission Practically Approves Hankyung Business Association Membership Fee Payment... "Subsidiaries' Autonomous Judgment" (Comprehensive)

The Samsung Compliance Committee (Compliance Committee) announced on the 26th that it "allowed affiliated companies to decide autonomously" regarding the payment of membership fees to the Korea Economic Association (Hankyunghyeop) by Samsung affiliates. This effectively amounts to an 'approval' decision.

Lee Chan-hee, Chairman of Samsung Compliance Committee, is answering reporters' questions 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@

On the same day, the Compliance Committee held a regular meeting and, after five hours of discussion on the payment of Hankyunghyeop membership fees, stated, "We acknowledged that Hankyunghyeop has been making efforts to ensure transparent fee management and agreed on the necessity for Samsung affiliates to pay fees as members."

The Samsung Compliance Committee also discussed the fee payment agenda at last month's meeting but did not reach a conclusion due to committee members raising concerns about personnel changes within Hankyunghyeop. In August last year, the committee had recommended that prior approval from the Compliance Committee be obtained before paying fees related to joining Hankyunghyeop.

With the Compliance Committee effectively giving its approval, Samsung affiliates are expected to soon decide on whether and when to pay the Hankyunghyeop membership fees after reporting to their boards of directors.

The Samsung affiliates that have joined Hankyunghyeop are Samsung Electronics, Samsung SDI, Samsung Life Insurance, and Samsung Fire & Marine Insurance.

Between late March and early April, Hankyunghyeop sent official letters requesting membership fee payments to about 420 member companies, including the four major groups: Samsung, SK, Hyundai Motor, and LG. The annual fee requested from each of the four major groups was 3.5 billion KRW. Hyundai Motor Group was the first among the four to pay the fee in early July, and SK Group also completed its annual fee payment last week. If Samsung decides to pay the Hankyunghyeop fees, it is expected that Hankyunghyeop will be able to continue the status of its predecessor, the Federation of Korean Industries (FKI). The four major groups had withdrawn from FKI following the political scandal involving state affairs manipulation.

During the transformation of FKI into Hankyunghyeop last year, the Korea Economic Research Institute (Hankyungyeon), which the four major groups were members of, was absorbed into Hankyunghyeop, thereby listing the four major groups as Hankyunghyeop members. This was regarded as a 'formal participation.' Amid this, as decisions to pay fees are being made one after another, the 'substantial participation' of these major groups is expected to become visible. However, LG Group is reportedly still reviewing the payment internally.

Although major conglomerates are deciding to pay fees, there are also demands that Hankyunghyeop continue reforms to restore its past status as the 'head of the economic community.' In fact, the Samsung Compliance Committee stated on the day, "We expressed concerns that the current ties of collusion between politics and business within Hankyunghyeop have not been completely resolved and agreed that Hankyunghyeop needs to supplement procedures to eliminate these concerns." It further emphasized, "We once again recommended to affiliated companies that fees paid to Hankyunghyeop should not be used for purposes deviating from the original intent, such as political-business collusion, and that they should immediately withdraw if violations occur."

Before the meeting, Compliance Committee Chairman Lee Chan-hee told reporters, "There is skepticism about whether Hankyunghyeop fundamentally intends to sever the ties of political-business collusion, given that a person regarded as close to the highest authority served as acting chairman of the economic organization and continues to be involved after the term." He pointed out, "The ties of political-business collusion must not become spoils of political power."

In response to Chairman Lee's remarks, Hankyunghyeop stated, "Since its launch last year, we have been actively working to strengthen our policy think tank functions and establish an ethics committee to promote compliance management. We plan to work even harder to become an economic organization trusted by the public."

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