Korean ex-president's relations with the super rich

Korean ex-president's relations with the super rich
PHOTO: The Korea Herald/ANN

The death of former President Kim Young-sam (1927-2015) evoked memories of Korea's rapid industrialization in the '90s and the business magnates who led the glory.

"The late Kim was reportedly the first president who did not take kickbacks from the conglomerates. Through various policies including the Real Name Financial Transactions and Confidentiality, he is recognised for having upgraded the country's business and economic infrastructure," a business insider said, paying tribute to the man who ended the 33-year military rule in 1993.

"Kim led Korea's development by seeking transparency in the economy and public service. It was on his watch that Korea joined the Organisation for Economic Cooperation and Development and became advanced," said the Federation of Korean Industries, an interest group of Korean conglomerates.

Kim helped the country through self-reform to reach the standards of global economies, making the country achieve US$100 billion (S$140 billion) in exports and $10,000 per capita in nominal national income," the Korea International Trade Association said.

But this doesn't mean his relationship with the corporate sector was cosy.

Perhaps his biggest archrival was the late Chung Ju-yung (1915-2001), the founder of Hyundai Group.

Chung was indicted for creating a slush fund in 1993, and was grounded while being probed. Many Hyundai Group affiliates faced tax investigations and were restricted from issuing bonds during Kim's term in 1993-1998.

There were rumours that the actions were taken to seek revenge as Chung ran against him in the presidential election. Even after emerging victorious, Kim hardly had contact with Chung until the business mogul died in 2001. Kim visited the memorial altar and said, "It is so hard to suffer the loss of a person who had achieved so much."

Samsung Group chairman Lee Kun-hee, too, had his ups and downs with Kim.

The former president opposed a number of diversification plans Lee had pushed at that time.

On Samsung's plans to diversify into the automotive industry, Kim reportedly retorted: "Over my dead body." But he later changed his mind in December 1994 after setting "globalisation" as his government's motto.

However, Kim set several conditions including a ban on recruitment of former Hyundai, Daewoo or Ssangyong Motor workers and others in order to protect the existing players in the field, which made it difficult for Samsung to gain a foothold in the auto industry initially. Lee in 1995 told reporters that "Korean businessmen are second class, while the administration is third class and politicians are bottom class." This reportedly infuriated Kim.

SK Group, whose current chairman Chey Tae-won married the daughter of Kim's political rival and former President Roh Tae-woo -- who ruled the nation from 1988 to 1993 -- faced a similar situation.

When the group won a bid to start mobile operations in 1992, Kim, who was an opposition leader at that time, publicly denounced the result by labeling it as cronyism. SK gave up the business and it was only in 1994 when SK acquired Korea Telecommunications that the company managed to reenter the market.

However, the grudge was deeper than expected. Under the former SK Group chairman Chey Jong-hyun (1929-1998), SK Group suffered a crackdown by the National Tax Service and the Fair Trade Commission.

But Kim knew how to use the carrot and stick.

He pardoned Chung and Kim during his term, "for the sake of the economy and their contribution to developing it."

"During Kim's regime, numerous business firms went bankrupt -- Hanbo, Sammi and Kia -- and Korea suffered from an economic meltdown only to be bailed out by the International Monetary Fund. But he was deeply interested in the economy as history will prove," a company official said.

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