Sungwook Cho: "Improvement of Large Corporations' Governance upon Fair Trade Act Passage"

Congratulatory Address at the 'Chaebol Reform Conference' Hosted by KDI

Jongwook Cho, Chairman of the Korea Fair Trade Commission. (Photo by Korea Fair Trade Commission)

[Asia Economy Reporter Moon Chaeseok] "If the Fair Trade Act amendment is passed, it will prevent blind spots in the regulation of private interest exploitation and the expansion of the controlling family's illicit control, and improve the ownership and governance structure and transaction practices of large business groups."

Chairman Cho Sung-wook of the Fair Trade Commission emphasized the importance of passing the Fair Trade Act amendment ahead of the regular National Assembly plenary session on the 2nd of next month.

He made these remarks on the 24th at 3 p.m. during his congratulatory speech at the 'Chaebol Reform Conference' hosted by the Korea Development Institute (KDI) held at the Schubert Hall of the President Hotel in Jung-gu, Seoul.

Chairman Cho expressed his expectation that with the amendment of the Fair Trade Act improving the governance structure of large business groups, "corporate value will increase and a culture of coexistence will spread throughout our economy," as it can reduce wrongful practices such as unfair internal transactions.

He informed that the Fair Trade Commission is ▲monitoring unfair internal transactions of large business groups ▲establishing a culture of sharing work ▲monitoring through disclosure systems and corporate group information disclosure ▲and inducing voluntary behavioral improvements within corporate groups.

Amid growing economic and social polarization, he reminded that "coexistence is essential" to guarantee sustainable growth of our economy.

He pointed out that without coexistence, it is difficult to maintain the fundamentals of small and medium-sized enterprises and mid-sized companies, and the industrial ecosystem will be damaged, ultimately negatively affecting large business groups as well.

Chairman Cho lamented that "opening up work opportunities by large business groups feels distant," citing the facts that ▲internal transactions of the top 10 groups are increasing and ▲95.4% of internal transactions are private contracts.

He diagnosed that "for a sustainable corporate and economic ecosystem, improvement of ownership and governance structures and sharing of work by large business groups are urgently needed."

Chairman Cho stressed that large business groups must make their governance transparent even for their own sake.

He emphasized, "Large business groups themselves need to make their governance transparent and demonstrate leadership differentiated from previous generations. This is not only for building a coexistence ecosystem but also a way to strengthen their own competitiveness."

Meanwhile, the National Assembly is unable to resolve conflicts surrounding the Fair Trade Act amendment, the Financial Group Supervision Act bill, and the Serious Accident Corporate Punishment Act bill ahead of the plenary session on the 2nd of next month.

Regarding the Fair Trade Act amendment, the Political Affairs Committee has not even been able to hold a meeting due to budget cuts for the Korean New Deal.