"Decided Not to Join Hankyung Association Following Semi-Management Committee and Board Opposition"
Among Samsung affiliates, Samsung Securities is reportedly not going to join the Korea Economic Association (HanKyungHyup), the successor to the Federation of Korean Industries (FKI).
According to the business community on the 21st, Samsung Securities decided after careful consideration, following opposition from the Samsung Compliance Committee (JunGamWi) and the board of directors, not to join HanKyungHyup.
Samsung Securities is the first among the top four conglomerates to decide not to join HanKyungHyup. This decision is interpreted as a result of concerns raised both inside and outside the business community about the insufficient justification for the return of the top four groups, including Samsung, to the FKI, as well as the Compliance Committee expressing worries about the FKI’s willingness to innovate.
Within the business community, it is believed that Samsung Securities, not being a party to the Compliance Committee agreement, has withheld membership succession due to the lack of institutional measures to prevent the recurrence of collusion between business and politics. Currently, seven Samsung affiliates have agreements with the Samsung Compliance Committee: Samsung Electronics, Samsung C&T, Samsung Life Insurance, Samsung SDI, Samsung Electro-Mechanics, Samsung SDS, and Samsung Fire & Marine Insurance.
Previously, Samsung agreed to the dissolution of the Korea Economic Research Institute (HanKyungYeon), under the FKI, after three meetings of CFOs from five affiliates and reports to each company’s CEO. It was announced that the automatic succession of HanKyungYeon membership would be concluded after discussions by the board and the Compliance Committee. Since Samsung’s withdrawal from the FKI in February 2017, five affiliates?Samsung Electronics, Samsung SDI, Samsung Life Insurance, Samsung Fire & Marine Insurance, and Samsung Securities?had remained members of HanKyungYeon.
Accordingly, the Samsung Compliance Committee expressed concerns about the FKI’s willingness to innovate during two extraordinary meetings held on the 16th and 18th, stating, "To prevent the undermining of Samsung’s compliance management commitment, if any affiliate decides to join HanKyungHyup, it will be recommended to immediately withdraw if any collusion between business and politics occurs." Based on the committee’s recommendation, Samsung Electronics held a board meeting on the 18th to report on the succession of HanKyungYeon membership, and the other affiliates completed their board reports before the FKI’s extraordinary general meeting on the 22nd.
With one Samsung affiliate deciding not to participate in HanKyungHyup, attention is focused on whether this will influence other groups’ decisions. Contrary to initial expectations that the top four conglomerates would return to the FKI, now rebranded as HanKyungHyup, the four groups appear to be drawing a line, emphasizing that discussions about the succession of HanKyungYeon membership are not equivalent to a genuine 'return to the FKI,' likely due to public criticism over concerns about collusion between business and politics. SK Group, Hyundai Motor Group, and LG Group are currently conducting internal discussions about rejoining the FKI.
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