Business groups are expected to withdraw their memberships from once-mighty chaebol lobby group Federation of Korean Industries (FKI) in earnest. As LG Group officially announced to leave the FKI on December 27 and Samsung and SK will follow suit soon, the FKI will be eventually dismissed.
LG Group said on the 27th, “The group decided to withdraw its FKI membership as of the end of this year and has officially delivered its intention to the FKI. Accordingly, LG will not be part of the FKI members or pay membership fees starting from 2017.”
LG Group chairman Koo Bon-moo said in a public hearing held by a special parliamentary committee in relation to the Choi Soon-sil scandal earlier this month that his group would leave the lobbying group. Koo said, “The FKI must be run like the Heritage Foundation while the member firms must remain as fraternal society members."
Samsung and SK will also officially announce their memberships from the FKI shortly. An official from Samsung Group said, “Samsung Electronics Vice Chairman Lee Jae-yong already promised to withdraw from the federation and there is nothing more clear than that. I am not sure the group has already delivered its official position to the FKI or not but it will keep its promise.” Lee said during the parliamentary hearing, “I will not personally work with the FKI in the future. Samsung will stop making a contribution to the FKI.”
In addition, SK Chairman Chay Tae-won also said at the hearing he would leave the FKI. So, SK Group is also expected to withdraw its membership from the FKI soon.” An official from SK Group said, “We are now checking the membership status by subsidiary. We will proceed with withdrawal procedure as soon as we are ready.”
LG’s latest decision is expected to make other members follow suit and could dismantle the federation. The FKI is managed with 40 billion won (US$33.14 million) of membership fees paid by 600 member companies, and half of the money – 20 billion won (US$16.57 million) – comes from Samsung, Hyundai Motor, SK and LG.