The New Chairman of Jeonggyeongryeon Emerges... Ryu Jin, the Chairman, Is a Leading Candidate Recommended by Many

Rejoining of the 4 Major Groups Weighed More for February Next Year than August
Attention on Whether Heads of the 4 Major Groups Will Become Chairmen After Rejoining

The Federation of Korean Industries (FKI), which is undergoing a high-intensity reform to regain its status as the leading economic organization, is understood to have a high possibility of nominating Ryu Jin, chairman of Poongsan, as the 39th (next) chairman earlier this month. The organization, renamed as the Korea Economic Association (KEA), is also increasingly likely to see the re-entry of the four major conglomerates (Samsung, SK, Hyundai Motor, LG) along with the appointment of the new chairman.

Ryu Jin, Chairman of Pungsan

On the 1st, the business community said that although the FKI has not yet officially confirmed Chairman Ryu as the candidate for the 39th chairman, he is regarded as the most likely leading candidate under the current circumstances. Chairman Ryu is fluent in English and Japanese at a native level. Leading a defense company and possessing a broad network, he is evaluated as the ideal candidate to achieve significant trade results as a prominent U.S. expert. Corporate chairmen recommended Ryu as the suitable next chairman of the FKI to Kim Byung-joon, the acting chairman of the FKI.

Earlier this month, Acting Chairman Kim plans to hold a closed meeting with 11 vice chairmen (Kim Seung-yeon, chairman of Hanwha; Lee Woong-yeol, chairman of Kolon; Shin Dong-bin, chairman of Lotte; Kim Yoon, chairman of Samyang Holdings; Ryu Jin, chairman of Poongsan; Kim Joon-ki, founding chairman of DB; Lee Jang-han, chairman of Chong Kun Dang; Park Jung-won, chairman of Doosan; Cho Won-tae, chairman of Hanjin; Heo Tae-soo, chairman of GS; and Cho Hyun-joon, chairman of Hyosung) to finalize the next chairman candidate. Subsequently, a unanimous nomination is expected at the extraordinary general meeting on the 22nd. This means the 39th chairman will effectively be decided early this month.

Currently, the possibility of a chairman from the four major conglomerates becoming the FKI chairman is low, as the FKI has a policy of not having chairmen from non-member companies. For a chairman from the four major groups to become the 39th FKI chairman, they must respond to the FKI’s request letter asking for re-entry before the chairman meeting early this month. Even if they respond, the agenda for re-entry of the four major groups will only be approved at the extraordinary general meeting on the 22nd.

The re-entry process is not simple. All four major groups must complete procedures involving their board of directors, internal control bodies, owner families, and strategic organizations. In Samsung Electronics’ case, according to the board’s articles of association, a majority of the 11 directors (at least 6 present) plus a majority of the attending directors (at least 4) must agree to approve the re-entry agenda. Approval from the Compliance Committee is also required. Coordination of opinions among key decision-makers such as Samsung Electronics Chairman Lee Jae-yong and Vice Chairman Jung Hyun-ho, head of the Samsung Electronics Business Support Task Force (TF), is necessary. This is why there are opinions that physical re-entry in August is difficult. There is growing support for the possibility of re-entry at the regular general meeting in February next year. Acting Chairman Kim said at the FKI-Japan Economic Friendship Association dinner event on the 28th of last month, "There is no set deadline for the (four major groups’ re-entry)."

President Yoon Suk-yeol and Hyundai Motor Chairman Chung Eui-sun are seen having a conversation before the groundbreaking ceremony of the electric vehicle-only factory held on April 11 in Kia Autoland Hwaseong, Hwaseong-si, Gyeonggi-do.
[Photo by Yonhap News]

If the four major groups return as members, there is an open possibility that one of their chairmen will be elected as the new chairman at the KEA regular general meeting scheduled for February next year. There is talk that Chung Eui-sun, chairman of Hyundai Motor Group, is a suitable candidate. Chairman Chung has been steadily attending FKI events recently. He appeared at the Korean version of Buffett’s lunch, 'Godsaenghanki,' a communication program for the MZ generation (born early 1980s to early 2000s), in May. He also showed up at the FKI-Japan Economic Friendship Association dinner event.

On the other hand, Chairman Lee Jae-yong is not free from judicial risks. In the past, he declared that he would not make donations to the FKI. SK Group Chairman Chey Tae-won must serve as the 24th chairman of the Korea Chamber of Commerce and Industry, a rival to the FKI, until February next year. LG Group Chairman Koo Kwang-mo is the youngest among the chairmen of the four major groups.

The individuals mentioned as candidates for the next FKI chairman are all tight-lipped. In particular, Chairman Chung is not only at the 'NCND (neither confirm nor deny)' level but has not expressed any opinion at all. Chairman Cho Hyun-joon also responded "No, no" to questions about the next chairman at the FKI-Japan Economic Friendship Association dinner meeting. Chairman Ryu said "Not yet" at the Korea-Japan Industrial Cooperation Forum hosted by the FKI and Keidanren on the 6th of last month.

The possibility of Acting Chairman Kim officially starting his term as the 39th chairman is low. Serving as acting chairman for six months, he has drawn a clear line saying "There will be no reappointment." He has a strong will to find a suitable candidate, hand over the chairman position, and restore the proper function of the economic organization, even if it means taking on the role of advisor for the reborn KEA.