Samsung Securities decides not to rejoin Korea’s top business lobby

Samsung Securities Co., in a surprise move, has decided not to rejoin South Korea’s top business lobby, the Federation of Korean Industries (FKI), which is striving to shed its long-standing image of being a collusive channel with politicians.

The decision by the brokerage unit of Korea’s top conglomerate Samsung Group reflects lingering concerns that it won't be easy for the FKI to keep a distance from political circles and that it could be influenced by politicians’ undue pressure, industry watchers said.

The move comes a few days after Samsung Group’s independent corporate compliance oversight committee recommended that Samsung affiliates consider returning to the lobby, although the panel expressed concerns over the feasibility of some of the FKI's proposed reform measures.

Other Samsung Group affiliates, including Samsung Electronics Co., Samsung C&T Corp. and Samsung Life Insurance Co., subject to the oversight committee decision, are widely expected to resume their FKI membership.

Samsung Securities, which remains outside the compliance oversight panel, has opted not to follow its recommendations, industry officials said. 

Founded in 1961, the FKI has served as a leading and respected business lobby representing Korea’s large conglomerates.

But its reputation was marred by a series of scandals, including a corruption scandal during the ousted President Park Geun-hye’s administration in 2016. Since then, many member companies, including Korea’s big-four conglomerates — Samsung, SK, Hyundai Motor and LG — have left the group.

The FKI has since vowed to drastically reform itself to regain the public's and business leaders’ confidence.

As part of its rigorous restructuring, the business lobby will rebrand itself as the tentatively named Korea Businesspeople Association after merging with an affiliated research firm, the Korea Economic Research Institute (KERI), to transform into a think tank representing the interests of Korea’s leading businesses.

The FKI is slated to hold an ad-hoc general meeting this Tuesday to approve the reform plans and appoint Jin Roy Ryu, the chairman of Korea’s leading copper smelter and defense equipment maker Poongsan Corp., as its new chairman.

One of Ryu’s top priorities will be to bring Korea’s major conglomerates back into the fold, analysts said. About 400 Korean companies are currently members of the group.

SK Group, which includes SK Inc., SK Innovation Co. and SK Telecom Co., and Hyundai Motor Group, which owns Hyundai Motor Co., Kia Corp. and Hyundai Mobis Co., are expected to rejoin the FKI once the business lobby reboots.

Write to Ye-Rin Choi at rambutan@hankyung.com
In-Soo Nam edited this article.