The Federation of Korean Industries (FKI) announced Tuesday a string of measures to revamp the business organization, including appointing its new chief, in a major overhaul aimed at restoring its reputation after years of setbacks over a political scandal.
In an extraordinary general meeting held earlier in the day, the FKI appointed Poongsan Group Chairman Ryu Jin as its new chair to take the helm of the country's largest business lobby.
Ryu, the leader of the major medium-sized enterprise that manufactures copper materials and defense products, had been widely speculated as the candidate for the FKI chairmanship. Ryu is known for his extensive personal and professional connections with the U.S. business community.
The board also approved the decision to change its Korean name to "Hangyeonghyeop" from "Jeongyeongryeon" as part of the reform, though its English name will remain unchanged.
The new name will be used upon the official approval of the changes in the articles of association by the Ministry of Trade, Industry and Energy, the FKI said.
The core part of the revamp plans is the decision to merge with the Korea Economic Research Institute (KERI), an FKI-affiliated think tank, to create the legal grounds for the top four South Korean conglomerates to return to membership following their withdrawals in early 2017.
Samsung, SK, LG and Hyundai dropped out of the FKI in the wake of a massive 2016 influence-peddling scandal that led to the ouster of then President Park Geun-hye.
In the revamp plans outlined Tuesday, the FKI said it will set up an ethics committee as part of efforts to beef up transparency and self-regulation against malpractice.
"We will clean up the dark past and untie the knots," Ryu said in his inauguration speech.
"We will practice ethical management and ensure that a transparent corporate culture takes root in the entire business community," he said, noting that the formation of the ethics committee is the first step it is taking to measure up to the public's expectations beyond mere compliance monitoring.
The FKI also adopted "a charter of ethics" to be enforced on the secretariat and member companies as part of its efforts to establish strict ethical standards.
The FKI was scrutinized over its suspected intermediary role in pressuring major business enterprises, including Samsung, to pay contributions to two foundations with ties to a close confidante of Park at the center of the corruption scandal.
The FKI, the largest and most influential business lobby in South Korea, has seen its presence wane since the scandal and is striving to freshen up its reputation.
The four conglomerates withdrew their membership from the FKI after the scandal broke, but they remain KERI members.
The merger of KERI will legally bring Samsung and other previous members back to the FKI. But the question remains whether the top business groups will actually be willing to participate in FKI-led initiatives and events, as skepticism hangs over the prospect amid negative public perceptions of business lobby groups.
Last week, 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.
Source: Yonhap News Agency