Ahead of presidential pardons, Korea’s chaebols curry favor with major investment pledges

Posted on : 2022-12-21 17:09 KST Modified on : 2022-12-21 17:09 KST
Even within the business world, many are describing the situation as “embarrassing”
From left to right: Lee Ho-jin, former chairperson of Taekwang Industrial; Lee Joong-keun, chairperson of the Booyoung Group; and Park Chan-koo, chairperson of Kumho Petrochemical. (Yonhap/courtesy of Booyoung/courtesy of Kumho)
From left to right: Lee Ho-jin, former chairperson of Taekwang Industrial; Lee Joong-keun, chairperson of the Booyoung Group; and Park Chan-koo, chairperson of Kumho Petrochemical. (Yonhap/courtesy of Booyoung/courtesy of Kumho)

Certain of Korea’s chaebol businesses have been hard at work ahead of the special presidential pardons planned for the New Year, hoping for pardons and reinstatement for their leaders with criminal histories.

The companies have been announcing large-scale investment plans and engaging in various forms of lobbying in an overt push to rescue their embattled leaders.

Even within the business world, many are describing the situation as “embarrassing.”

In its investigation Tuesday, the Hankyoreh found that the Korea Chamber of Commerce and Industry (KCCI) formally presented the government with a joint list recently on behalf of business groups naming business leaders as suggestions for the upcoming presidential pardons.

The group’s list of leaders to receive pardons and reinstatement was found to have included Lee Ho-jin, former chairperson of the Taekwang Group; Park Chan-koo, chairperson of Kumho Petrochemical; and Lee Joong-keun, chairperson of the Booyoung Group.

All of them had also been named as suggestions for National Liberation Day pardons in August but were not included among those granted pardons and reinstatement.

“Given the Yoon Suk-yeol administration’s pro-business emphasis and the serious situation confronting the economy next year, we have high expectations for the pardons of businesspeople,” said a senior official at one business group.

“Since these pardons are focused mainly on politicians, there is likely to be more intense competition among business world candidates,” they predicted.

Against this backdrop, the Taekwang Group drew major attention with its surprise announcement of a large-scale investment plan on Monday. The plan included investment totaling 12 trillion won over a 10-year period through 2023 toward discovering “future foods” and hiring 7,000 new employees.

This was effectively the first time Taekwang had ever announced a large-scale investment and hiring plan at the group level.

Explaining that it had “planned an announcement early next year but decided to make an official announcement after some reports in the press,” Taekwang stressed that there had been “no other intention.” But many in the business world said it was part of a “shameless public opinion campaign.

“It’s pretty random to suddenly announce a 10-year investment plan at the end of the year,” said an official with one of South Korea’s four biggest business groups.

“It looks like they wanted to create a favorable opinion climate for a pardon review, but they were too overt about it,” they suggested.

Kang Jeong-min, a researcher with the group Solidarity for Economic Reform, said, “To announce an investment plan at the current moment is inevitably going to make people see it as a gesture to win a pardon.”

“The scale of investment is also excessive. They need to share more details about the content,” he suggested.

Lee Ho-jin, the Taekwang Group’s former chairperson, was arrested in late 2018 amid controversy over his behavior after having been granted bail. He received a three-year sentence, which he completed in October 2021.

Sources also said Lee Joong-keun of the Booyoung Group has been waging an aggressive lobbying campaign.

“Multiple members of the National Assembly have made requests regarding the need for a pardon for Lee Joong-keun,” said a high-level official with one business group.

Another business group official said that Lee was “waging a concerted campaign with officials at major media companies to foster a favorable opinion climate.”

In response, the Booyoung Group said, “We have never made any requests to any particular National Assembly members with regard to a pardon, and we are not doing anything beyond regular public relations activities.”

Lee was granted conditional release in August 2021 while serving a 30-month sentence after being convicted of 12 charges, including embezzlement and breach of trust.

Most of the convicted business bigwigs campaigning for pardons and reinstatements are subject to two-year restrictions on employment according to the Act on the Aggravated Punishment of Specific Economic Crimes. Once convicted, a person cannot be employed by the same company for a two-year period after their sentence is completed or their suspended sentence ends.

Pardons and reinstatements represent a surefire route for resolving these restrictions and other barriers to their leaders returning to management activities.

In May 2022, Kumho Petrochemical chairperson Park Chan-koo stepped down as CEO, retaining only the title of “head” while focusing on external activities. Despite a legal battle with the Ministry of Justice to allow his reinstatement as CEO, he ended up in a bind when the Supreme Court ruled that he was subject to the employment restrictions even during his suspended sentence period.

If he is included among the recipients of pardons and reinstatements, this will pave the way for him to return fully to management while sidestepping any controversy over illegal employment.

The Ministry of Justice is scheduled to hold a pardon review committee meeting Friday to select the final list of people to be granted special New Year’s pardons by the administration and report them to Yoon himself as the person with the power to grant them.

In a joint statement Tuesday, the groups People’s Solidarity for Participatory Democracy and Solidarity for Economic Reform said, “There are no societal conflicts or contemporary issues to be found that can only be resolved by pardoning and reinstating chaebol heads.”

“We oppose the pardoning and reinstating of problem-ridden chaebol heads, and we urge President Yoon Suk-yeol to exercise his pardon authority rigorously and prudently as the Constitution dictates,” the statement added.

By Kim Hoe-seung, senior staff writer; Lee Jeong-hun, staff reporter

Please direct questions or comments to [english@hani.co.kr]

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