Kim Sang-jo, the new head of South Korea’s antirust watchdog Fair Trade Commission, met CEOs from the nation‘s four largest conglomerates on Friday and urged them to voluntarily change their decision making process to be more transparent and democratic.

The former shareholder activist assured the top businessmen that the Moon government will not unilaterally push the so-called chaebol reform, by slapping them with punishments or regulations. The government, as well as himself, is ready to listen to businesses and seek ways to create better business conditions.

“What the new government is trying to do is not to make new regulations that might add burdens to businesses,“ Kim said. “I arranged this meeting to ask for voluntary efforts to make changes and exemplary cases.” 

But the businesses also have to undergo soul-searching on its management practices, often blamed for their non-democratic processes.

In South Korea, controlling families of chaebols often have total control over group management.

“I am not saying that it’s all the companies’ fault,” he said. “But there are some parts the companies should look back on.”

Kwon Oh-hyun, vice chairman of Samsung Electronics, Chung Jin-haeng, chief executive officer of Hyundai Motor Company, Park Jung-ho, chief executive officer of SK Telecom and Ha Hyun-hwoi, chief executive officer of LG Corp. attended the meeting held at the headquarters of Korea Chamber of Commerce and Industry in central Seoul.

Lee Dong-geun, vice chairman of KCCI, a business lobby group, also attended the meeting.

The hour-long closed-door meeting went successfully, Kim said as he made his exit, while declining to reveal details of the conversation citing confidentiality of the participated companies‘ operations.

The FTC chairman said he explained the economic democratization drive pursued by President Moon and what he had discussed with the president’s chief policymaker Jang Ha-sung and Deputy Prime Minister for Economy Kim Dong-yeon on Wednesday. The talks reportedly touched on reform issues, such as unfair internal transactions among affiliates, cross-shareholding structures and other illegal asset trades.

“It was a frank and useful conversation,” Kim said. “The talks would help the business community significantly.”

Kim has vowed to enhance monitoring of the four largest family-run conglomerates here -- Samsung, Hyundai Motor, SK and LG. Kim was appointed the FTC chairman by President Moon last week, despite strong objection from conservative opposition parties.

The antitrust chief had conveyed his intention to the KCCI to meet either the chairmen or members of the group owners, but the meeting couldn’t be arranged due to the current situations of the relevant parties.

Samsung’s heir apparent Lee Jae-yong is currently detained on charges of bribery to former President Park Geun-hye and her old friend Choi Soon-sil, while Hyundai Motor Group Chairman Chung Mong-koo asked to be excused for health reasons.

“The commission judged a conversation with the professional CEOs could be more effective in explaining the Moon government’s policies objectively,” an FTC official said.

The FTC is currently investigating the nation’s 45 biggest business groups by asset on whether any of them are coercing unfair deals with subcontractors and small and medium-sized enterprises.

At a press conference held on Monday, Kim said he plans to expand the FTC’s current business group division into a business group bureau to better monitor such unfair deals, mostly likely in late July.

While enhancing the monitoring, the FTC chief said he will hold similar dialogues with the chaebol businesses several more times when needed in order to better explain the government’s policies and help increase policy predictability for the business community.

By Song Su-hyun (song@heraldcorp.com)