Korean business community in depths of crisis; Among the owners of major business groups, eight chief executives are currently detained or sentenced to imprisonment, marking the largest number since the May 16 military coup in 1961
October 2, 2013 Leave a comment
Korean business community in depths of crisis
Kim Eun-pyo, Noh Won-myung
Korea’s business community is moaning in the wake of a series of detentions of top business leaders. Business conglomerates are already triply distressed by reduced competitiveness, cash crunch and poor business performance in a protracted global recession. Business groups which have sought speedy growth buttressed by family owners in the global market have hit a snag in their long-term strategy. SK Group and Hanwha Group, the nation’s third and 12th largest conglomerates, respectively, are in this case. Among the owners of major business groups, eight chief executives are currently detained or sentenced to imprisonment. Some say it marks the largest number since the May 16 military coup in 1961. The market is already weighed by concerns over a liquidity crisis caused by a series of downfalls of Woongjin, STX, Pantech and more recently Tongyang, which had brought a new wave of change in the local business community. Rumors are already swirling that some of the nation’s top 30 business groups may be hit by a severe liquidity crunch although little signs are surfacing. “Authorities should pay attention that there is a serious optical illusion in Korea’s industry situation due to upbeat sales of Samsung Group and Hyundai Motor Group. If they rest on some positive economic figures of foreign exchange reserves and trade surplus, the Korean economy could face a big crisis as early as next year,” warned Jangwoo Lee, Professor of Kyungpook National University.
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