Chaebol Reform Activist Nominated as Head of Fair Trade Watchdog

On May 17, South Korean President Moon Jae-in nominated Hansung University professor Kim Sang-jo as the new chairman of the Korea Fair Trade Commission (KFTC).

The activist and expert advocating chaebol reform held hands with the President in March this year after having studied finance and worked as a civic activist in favor of chaebol reform. He is one of those who set up the chaebol reform monitoring team of the People's Solidarity for Participatory Democracy, which is regarded as the starting point of civil movements for the reform in South Korea. Headed by him, the team has dealt with a variety of major issues related to finance and conglomerates in South Korea.

Chaebol reform by the Moon Jae-in government is likely to speed up once the nominee sails through his confirmation hearings. Then, the investigation bureau of the KFTC is likely to be put back into operation. “The investigation bureau used to put restrictions on unfair internal transactions between chaebol subsidiaries between 1998 and 2007, but the bureau has been significantly reduced in size in the following years,” he remarked during the election campaign period, adding, “This is why few investigations have been carried out on unfair internal transactions within conglomerates since 2013, when the Fair Trade Act was amended for such investigations.”

The nominee is expected to prefer the enhancement of the power of the law in force to the introduction of new regulations based on legal amendments. “Any change in law takes time and is not that practical and making the current law more effective is a better option,” he recently mentioned, continuing, “The National Pension Service, the KFTC and the current law are enough to curb the concentration of economic power on conglomerates.”

The four largest business groups in South Korea are likely to be his reform targets. He said in a recent interview that the four groups’ assets account for half of the total assets of the top 30, the 11th- to 30th-largest ones currently have a hard time doing business these days with even some of them showing signs of insolvency, and he doubts the effect of regulations on such enterprises.