Against Their Willing
POSCO chairman Kwon Oh-joon and Lotte Group chairman Shin Dong-bin tried to participate in an economic mission that accompanied President Moon Jae-in’s visit to Indonesia only to fail. In the Korean business world, there is speculation that Cheong Wa Dae (Korea’s White House) will replace the POSCO head as chairman Kwon was scratched off from the list of members of an economic delegation which followed President Moon when the President visited the US in June.
POSCO chairman Kwon applied for participation through the Korea Chamber of Commerce and Industry last month in order to accompany President Moon who was visiting Indonesia on September 9 as a member of the Korean economic delegation to Indonesia. Lotte chairman Shin did not officially apply for participation in the delegation but pushed forward with participation in the delegation in consideration of the fact that he had been engaging in the distribution business in Indonesia. Finally, the economic delegation included about 100 major corporate executives, but Kwon and Shin did not make the list. POSCO chairman Kwon's failure to participate in a presidential economic mission was the second since an economic delegation to the United States in June.
Indonesia is a key hub for POSCO's Southeast Asian production system. POSCO is planning to steadily expanding its investment in response to growing steel demand as well as operating the first overseas integrated steel mill in Indonesia with a production capacity of three million tons. To date, POSCO has been the largest Korean investor in Indonesia among Korean companies. Lotte is also expanding its distribution business with Indonesia as a new growth engine area.
Chairman Kwon who was successfully re-elected to serve his second term early this year became a subject of a special investigation in connection with the Park Geun-hye and Choi Soon-sil scandal but an allegation was made that chairman Kwon was elected as chairman of POSCO for the first term on the regime’s coattails. The Korean business community construes that Cheong Wa Dae repeatedly expressed its rejection of chairman Kwon. That is to say, the community believes that Cheong Wa Dae directly put pressure on chairman Kwon, suggesting that chairman Kwon make a decision about his future on his own.
POSCO has repeatedly gone through a vicious cycle in which CEOs are changed every time regimes have changed. Chairmen Hwang Kyung-ro and Chung Myeong-sik did not complete their terms after first chairman Park Tae-joon resigned due to a political disagreement with President Kim Young-sam. Following his successor, Kim Man-je, Yoo Sang-boo and Lee Ku-taek resigned shortly after new governments’ inauguration or with large part of their terms remaining.
In 2013 Park Geun-hye was the President, POSCO chairman Chung Joon-yang joined an economic delegation for President Park’s visit to China but was excluded at a local dinner event, and officially resigned in November of that year in the long run. An official of POSCO expressed a regret, saying, "We had much anticipation since if chairman Kwon had accompanied President Moon's visit to Indonesia, it could have dismissed a rumor that chairman Kwon will step down as POSCO chairman without finishing his current term.
Inside POSCO, it has been forecast that chairman Kwon will not be replaced as others in the past as lately the steelmaker has performed well and entered a stage to finalize work to restructure poorly performing subsidiaries and chairman Kwon was elected as chairman of POSCO for the second term and as vice chairman of the World Steel Association early this year. "Isn’t it another deep-rooted evil for this government to repeat the situation in which the POSCO chairman has to resign every time regimes changes?" said another official of POSCO, showing his dissatisfaction with the Moon administration.
It is said that Lotte Group chairman Shin did not directly apply for participation after judging that the prosecutor’s demand for a ten-year sentence for chairman Shin on charges of managerial misconduct in the first trial will detrimentally affect an examination of him for the selection of members of the economic delegation and moved forward with additional inclusion but failed to enter the final list. Originally Shin expected that he would join the economic delegation so made appointments with local Indonesian companies by taking into account President Moon’s schedule and activities in Indonesia but did not make it.