2016 was a very tough year for Chaebols (Korean Conglomerates). President Park’s scandal exposed a lot of the dirty side of Chaebols and now the posssible future South Korean president Moon Jae-In has announced he will reform chaebols and bring an end to their corruption. Chaebols have long had their hands in politics. The main Chaebols being Samsung, Hyundai, SK, and LG. Samsung had a terrible 2016, not only were they connected to President Park’s scandal but they also had a major international problem with its Galaxy Note 7 catching fire. Korean Chaebols in general have not performed well in 2016 mainly because of their executive decisions which are made by members of the family rather than the most qualified for the job.
Korea now has to look forward to revive their economy and have a system where politics and business go hand in hand. This means getting bribery out of politics and investigating any allegation of donations for favors. This political will to impose change is a breath of fresh air. Lawmakers are now fully ready to introduce legislation which will make Chaebols open up to outside ownership and management. Along with an overall Chaebol reform starting with the top 4 mentioned above.
The first step that Moon will take will be in regards to trade regulations. He will reduce the concentration of economic power by focusing those regulations on the 10 largest chaebols. Also Moon will go hard on crimes committed by Chaebols to take out serious anti-market criminals and restrict the power of the president to give pardons to Chaebol family members. No longer will Chaebol’s who commit crime have their prison terms suspended like that happened with the “Nut Rage” incident by Heather Cho. Unfair shareholder voting rights will be monitored after seeing what happened between the merger between two Samsung companies lead by Lee Jae-Young.
With all these changes from Moon, 2017 looks to be a rough year for Chaebols.