LG Group, South Korea’s fourth-largest conglomerate, said on Dec. 27 that it will be leaving the Federation of Korean Industries, the nation’s largest business lobby group that has recently been embroiled in the influence-peddling scandal involving President Park Geun-hye.
“We will not participate in FKI’s activities from 2017,” the group said in a statement.
|LG Group Chairman Koo Bon-moo|
LG is the first chaebol to declare its departure from the FKI that was established by Samsung Group founder Lee Byung-chull back in 1961. Nearly half of its annual budget, worth about 90 billion won (US$77.4 million), comes from membership fees paid by major companies.
The decision comes after business tycoons appeared at a parliamentary hearing early this month on their funding to shady foundations controlled by the president’s long-time confidante Choi Soon-sil possibly in return for business favors. All the donations were given through the FKI.
During the hearing, some chaebol owners, including Samsung Electronics
Vice Chairman Lee Jae-yong
, the founder’s grandson, hinted that they could leave the lobby group soon.
“I’m not entitled to decide (the fate of) the FKI itself, but personally, I will not be involved in its activities,” the Samsung heir said. LG Group Chairman Koo Bon-moo
also said the FKI could be reorganized itself into a research think tank like the Heritage Foundation, a Washington D.C.-based think tank.
Industry watchers say other major companies will likely follow suit amid mounting criticism about the FKI’s central role in the snowballing presidential scandal.
A Samsung spokesperson said the nation’s largest conglomerate is also considering leaving the lobby group but nothing has been decided yet.
By Lee Ji-yoon (firstname.lastname@example.org)