The Federation of Korean Industries (FKI) gathered for an extraordinary general meeting on Tuesday, where it announced plans to revamp the organization and appointed Poongsan Group Chairman Ryu Jin as its new chair. The goal of the revamp is to restore the FKI’s reputation after being negatively impacted by a political scandal.
The board of directors approved the decision to change the FKI’s Korean name to “Hangyeonghyeop” from “Jeongyeongryeon” as part of the reform, though its English name will remain unchanged. This change will be finalized after the Ministry of Trade, Industry and Energy gives its approval.
The core aspect of the revamp includes merging with the Korea Economic Research Institute (KERI), an FKI-affiliated think tank, to enable the return of the four major South Korean conglomerates to the organization. Samsung, SK, LG and Hyundai had pulled out of the FKI in early 2017 due to a major 2016 influence-peddling scandal that caused the ousting of then President Park Geun-hye.
Ryu Jin, the new chair of the Federation of Korean Industries (FKI) and chairman of Poongsan Group, appears at the FKI headquarters in Yeouido in western Seoul to attend an extraordinary general meeting on Aug. 22, 2023. (Yonhap)
As part of the revamp, the FKI will create an ethics committee to improve transparency and self-regulation against any unethical practices. “We will clean up the dark past and untie the knots,” Ryu said in his inauguration speech. Additionally, the FKI also adopted “a charter of ethics” to be enforced on the secretariat and member companies to set up strict ethical standards.
This photo taken Aug. 20, 2023, shows the headquarters of the Federation of Korean Industries in Seoul's western Yeouido district. (Yonhap)
The independent compliance oversight committee of Samsung recommended Samsung affiliates rejoin the FKI on condition that they will “immediately withdraw if there is any act of politics-business collusion.” Fifteen Samsung affiliates, led by Samsung Electronics Co., pulled out of the FKI in early 2017, acting on a pledge by Executive Chairman Lee Jae-yong, to clean up the business after the scandal.
Lee was sentenced to 2 1/2 years in prison after being convicted of bribery in connection with the scandal. Lee was released on parole in August 2021 and reinstated after receiving a presidential pardon a year later.
Samsung Electronics and four other Samsung affiliates, including Samsung Life Insurance Co. and Samsung SDI Co. remain KERI members. On Monday, Samsung Securities Co., a KERI member, said it will not rejoin the FKI, factoring in the decision by its board and the compliance committee’s recommendation.
Officials at SK, LG and Hyundai said they are discussing the matter internally and have not reached a decision yet.