Plunge Pontificates

A place for my thoughts.

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Tuesday, June 28, 2005

Korea = SamSungNation ?

A senior researcher at the Korea Institute of Finance, Lee Dong-gull, has contended the principles and constitutionality of the country's financial industry “are being shaken by the excessive influence of a particular mammoth chaebol." The chaebol -- or family-owned conglomerate -- is Samsung. Lee, who served as vice chairman of the Financial Supervisory Commission (FSC) for a year and a half from March 2003, accused the commission of failing to tackle Samsung's flagrant breaches of regulations.

As examples Lee cited that Samsung Card, one of the group’s subsidiaries, breached the law by not seeking FSC approval for holding a 25.6 percent stake in Everland, a Samsung Group flagship that engaged in creative accounting when it calculated the 19.3 percent stake it in turn holds in Samsung Life Insurance not in market prices but in book value. Then there was Samsung Life Insurance diverting some W2 trillion (US$2 billion) in profits that should have gone to the insurers…

So, are they above the law? Have they become so powerful as to be untouchable? This will be interesting to watch and see if someone will have the cahones to step up and slap them on the nose.