PSPD in English About PSPD 2019-07-09   2321

[Annual Report 2018] Monitoring Economic and Financial Power

Monitoring Economic and Financial Power

#Samsung biologics’ accounting fraud #Samsung C&T annexation #Lee Kun-hee’s borrowed-name accounts #MB imprisonment #DAS’ real owner #Chaebol Reform #Opposition to alleviation of regulations on the separation of banking and commerce #Exemption law for internet-only banks

 

Actions to Discover Samsung Biologics’ Accounting Fraud and Lee Kun-hee’s Borrowed-Name Accounts 

The longstanding efforts of the People’s Solidarity for Participatory Democracy (PSPD) to monitor Samsung, a company that regularly acts like it is above the law, have finally revealed the full picture of the illegal succession of vice president Lee Jae-yong. PSPD firmly held that Samsung Biologics’ valuation was manipulated during the merger of Cheil Industries and Samsung C&T. This action was at the core of the succession of Lee Jae-yong, and resulted in the Securities and Futures Commission of the Financial Services Commission deciding against the merger, a merger regarded as ‘intentional accounting fraud’. PSPD also actively responded to Samsung’s counterclaims relating to the case, and revealed that Samsung biologics’ financial accounting fraud caused a loss of around KRW200 billion to the National Pension Service. It also resulted in the company transferring more than KRW1 trillion to Lee Jae-yong, actions which demand further investigation. As for the case of Chairman Lee Kun-hee’s borrowed-name accounts, a case that was continuously appealed, it resulted in the imposition of a penalty for violating the real-name financial system and the collection of unpaid income tax. This was an opportunity to reaffirm the principles of the real-name financial system, which until this point had been virtually unknown.

 

Campaign to End Chaebol’s Illegal Corporate Domination and Concentration of Economic Power

In 2018, PSPD sort ways to remedy the chaebol-intensive economic structure, that allows owner families to control the entire business with only a small proportion of shares, and sees the committing of numerous illegal acts to maintain control. PSPD contributed to preventing mergers at Hyundai Motor Group, which were solely for the benefit of the owning family. We did this by publishing an analysis report pointing out that Hyundai Motor Group’s plan to restructure its investment structure, which some argued was a solution to the circular shareholding loop, was in fact intended to advance family succession. Moreover, PSPD conducted campaigns to root out unfair trade practices between Hyundai Motor Group’s primary subcontractors, and their secondary and tertiary subcontractors. PSPD also worked towards pressuring the National Pension Service to introduce an effective stewardship code and exercise its shareholder rights against Korean Air to root out abuses committed by the owner’s family. These include the now famous ‘Nut-Rage’ incident and other abuses. PSPD also accused Cho Yang-ho, chairman of Korean Air, and his family with breach of trust for allegedly illegally transferring Korean Air’s trademark rights to Hanjin.

 

Monitoring Financial Power – Responding to Financial Policies and Deterring Damage Against the Principle of Separation of Banking and Commerce

Regulations on the separation of banking and commerce have prevented the concentration of additional economic power in large conglomerates, and have helped maintain minimum financial order. However, the government passed an Exemption Law for Internet-only Banks, which are de facto Chaebol banks, without any kind of democratic procedure or discussion. In addition, by easing restrictions on the separation of banking and commerce, they have opened the door for conglomerates to own financial capital, with the potential risks and damage that could result. Unfortunately, despite the best efforts of PSPD and other NGOs, we failed to prevent the passage of this bill. However, this did not stop PSPD from raising the issue of suspected illegal or improper use of established Internet-only banking institutions, such as K-bank, and continuing to raise the issue of deteriorating soundness, demanding related measures by financial authorities. In addition, PSPD have actively responded to the issue of the eligibility of major shareholders after the passing of the Exemption Law.

 

Main Activities

  • 01/05 [Press Release] Proof of a real owner of DAS.
  • 02/12 [Press Release] Request for an audit into the Financial Services Commission’s unlawful dealings over K-bank accreditation.
  • 04/04 [Statement] Urging revision of the enforcement ordinance in the Fair Trade Act related to regulations regarding fraud by conglomerate owner families for their private interest.
  • 05/16 [Panel Discussion] Debate on the restructuring of Hyundai Motor Group’s investment structure.
  • 07/04 [Accusation] Against Cho Yang-ho and Cho Won-tae for breach of trust, related to suspicions of the unauthorized transfer of trademark rights to Korean Air.
  • 08/07 [Panel Discussion] Debate on the separation of banking and commerce
  • 07/19 [Accusation] People in charge of accounting fraud at Samsung Biologics, including representative directors of Samsung Biologics, Samjung and Ahnjin Accounting Corporations. 
  • 10/25 [Policy Data] Publication of policy report on corporate governance issues at Hyundai Heavy Industries Group.
  • 11/22 [Press Release] Requested that Financial Supervisory Commission set up special supervision on accounting in 2015 for integrated Samsung C&T.
  • 12/20 [Panel Discussion] A sit-down meeting on the merger between Cheil Industries and (Former) Samsung C&T, revealed by Samsung Biologics’ accounting fraud.
 

정부지원금 0%, 회원의 회비로 운영됩니다

참여연대 후원/회원가입


참여연대 NOW

실시간 활동 SNS

텔레그램 채널에 가장 빠르게 게시되고,

더 많은 채널로 소통합니다. 지금 팔로우하세요!