SEOUL (Reuters) - South Korea’s antitrust chief on Friday said he expects Samsung Group to unravel its governance structure in the near future, as the government and investors call for reform of the country’s powerful family-controlled conglomerates, or chaebols.
Chaebol families have come under increased scrutiny since the arrest last year of Samsung Group heir Jay Y. Lee, who denies wrongdoing, on charges of bribery and embezzlement.
Rekindling public discontent toward chaebol families this month was the investigation of a daughter of the chairman of Korean Air Lines Co Ltd (003490.KS) for allegedly throwing water at an attendee of a business meeting. The investigation comes about three years after another daughter was jailed for berating an employee over incorrectly served nuts.
“Samsung Group has been busy announcing various measures,” changing the way it does business, Kim Sang-jo, head of the Korea Fair Trade Commission, told foreign media.
Kim is popularly known as the “chaebol sniper” for his shareholder activist campaigns before joining the Commission. He has often criticized chaebols for complicated cross-shareholding structures that he has said are aimed at cementing family control.
Speaking of recent changes at the country’s biggest conglomerate, Kim referred to Samsung SDI Co Ltd’s (006400.KS) sale of a stake in affiliate Samsung C&T Corp (028260.KS) to ease cross-shareholding ties, and a Samsung Electronics Co Ltd (005930.KS) unit hiring temporary repair workers as regular staff and recognizing their union.
Kim called the moves “enormous changes”.
“I think Samsung’s most crucial task is to resolve ties between Samsung Life and Samsung Electronics,” said Kim. “In the not too distant