Happy hour? Craft beer, no ties as South Korea’s leader hosts business tycoons

Reuters News
Posted: Jul 27, 2017 1:56 AM

By Hyunjoo Jin and Haejin Choi

SEOUL (Reuters) - Craft beer and finger food will replace a full-course meal when South Korean President Moon Jae-in plays host to corporate tycoons on Thursday and Friday for the first time since his election in May.

But the casual setting belies a more serious business at hand for Moon, who intends to push his message of corporate reform after coming to power on a pledge to curb the power of the country's conglomerates that dominate the economy.

The event at the presidential Blue House is a departure from previous meet-and-greets, where corporate bosses in pressed, dark suits and ties were typically made to sit and listen as presidents spoke. Moon proposed a no-tie, no-jacket meeting in order to have “frank, unreserved” conversations, a presidential official said.

Instead of hosting the 15 chaebol leaders in the imposing, formal main building where most events take place, Moon will take his guests to Sangchunjae, a scenic Korean-style house with a garden, in the grounds of the Blue House.

But the two days of meetings are likely to be anything but comfortable for the leaders of the conglomerates, the top 10 of which account for more than half of the stock market's value, according to the Korea Stock Exchange.

Moon said he will break close ties between government and businesses in the wake of a corruption scandal involving his impeached predecessor Park Geun-hye and Samsung, the largest of South Korea's powerful family run conglomerates, known as chaebols.

Samsung leader Jay Y. Lee will not be at the meetings with Moon because he is in jail while on trial charged with bribery and embezzlement in the Park scandal. Samsung Electronics Chief Executive Kwon Oh-hyun will attend instead.

But Lotte Group Chairman Shin Dong-bin, who has also been charged with bribery in the Park case, is due to attend. Shin, who attends his trial on Thursdays and Fridays, has been given court permission to join the event, a group spokesman said.


Moon wants chaebols to create jobs, improve working conditions and to stop using their dominant market positions to squeeze small and mid-size suppliers.

He has also talked of raising taxes for the largest conglomerates to pay for his economic stimulus plans and welfare packages.

"Those attending can be more relaxed with a beer on a hot day in a stand-up, outdoor meeting, followed by a meeting indoors. There will be fewer attendants and there will be more time for practical conversations," a person with direct knowledge of the meeting, who declined to be identified, said.

Days before the Blue House event, companies including Samsung, SK Hynix and flat-screen producer LG Display, have announced big investments, new jobs and plans to help suppliers.

"It is positive that a person in authority tries to have an unassuming demeanor. But businesses will come under pressure to create more jobs," an official at food-to-entertainment giant CJ Group told Reuters, asking not to be identified because of the sensitivity of the matter.

CJ, South Korea's 15th biggest conglomerate by assets, said on Wednesday it will turn about 3,000 contract workers into full-time employees.


Several chaebol chiefs, who attended meetings with Moon's predecessor, will be absent and represented instead by their sons or CEOs.

Samsung chairman Lee Kun-hee has been hospitalized since May 2014 following a heart attack and a Hyundai Motor Group official, who asked for anonymity, said Chairman Chung Mong-koo, 79, would not attend because of health concerns.

Chung's only son and Hyundai vice chairman, ES Chung, will represent the group.

The average age of the 15 leaders is 61, compared to 69 for Park’s first meeting with top business leaders in 2013.

"Moon seems to be trying to shrug off his "anti-chaebol" image through this casual setting. I am interested in seeing what benefits Moon would give to businesses though, such as deregulation," said Park Ju-gun, the head of corporate analysis firm CEO Score.

(Additional reporting by Christine Kim, Editing by Soyoung Kim and Neil Fullick)