The “Octopus Effect” goes means again to South Korea’s post-war period.

Lee Jae Yong (identified professionally within the West as Jay Y. Lee), the vice chairman of Samsung Electronics, was just lately granted a presidential pardon, slicing his two years and 6 months jail sentence after being discovered responsible of paying $8 million in bribes to South Korean President Park Geun Hye and her aide to make sure assist for the merger of Samsung C&T and Cheil Industries, which shareholders opposed as a result of it could degree up his management of his household’s empire.

In a joint assertion, the South Korean authorities stated, “In a bid to overcome the economic crisis by vitalizing the economy, Samsung Electronics Vice Chairman Lee Jae Yong, whose suspended prison term was ended recently, will be reinstated.

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Lee Jae Yong | EPA-EFE/JeonHeon Kyun/Pool

On December 5, 2014, Heather Cho (also referred to as Cho Hyun Ah), then Vice President of Korean Air and daughter of Korean Air chairman and CEO Cho Yang Ho, was enraged when macadamia nuts had been served to her in a bag as a substitute of on a plate. She bodily assaulted flight attendant Kim Do Hee and made cabin crew chief Park Chang Jin kneel earlier than her for forgiveness as she repeatedly hit his knuckles along with her digital pill. She additionally made Korean Air Flight 086 flip again to the airport gate regardless of already getting ready to take off from the John F Kennedy International Airport in New York.

Cho was sentenced to at least one yr in jail for obstructing aviation security on February 12, 2015, however the Seoul High Court discovered her not responsible of the cost in May 2015. Her sentence was decreased to 10 months and two years of suspension. After 5 months in jail, she was launched.

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Heather Cho | AP

These are simply two examples of how chaebol heirs get off flippantly from offenses they’ve dedicated, no matter how grave the violations are. Chaebols are reportedly untouchable and above the legislation.

In Korea, giant conglomerates dominate the financial system, accounting for 80 % of the gross home product (GDP). The greatest conglomerates are Samsung, LG, Hyundai, Lotte, and SK, that are so omnipresent they’ve turn into generally known as “octopus” corporations, says Professor Yon Kyung Lee, a political sociologist on the University of Toronto. Like an octopus, the far-reaching tentacles of those conglomerates have prolonged to the topmost ranges of politics.

Many leaders in Seoul have equated the success of the chaebols with South Korea’s postwar prosperity. Chaebols had been closely supported after the Korean War, having fun with cheaper electrical energy, tax incentives, a “Buy-Korea” coverage, and even assist to suppress union actions. Unfortunately, this assist led to enterprise monopolies, oppressed the labor motion, and paved the way in which for a protracted historical past of bribery and corruption.

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Former Samsung Chairman Lee Kun Hee was additionally convicted for tax evasion in July 2009 however pardoned by the South Korean authorities in December of the identical yr. | Reuters

To at the present time, Chaebols stay highly effective as a result of they’re supported by the federal government, no matter who the President is. This is as a result of the chaebols are relied on for the nation’s financial development.

This can also be why Lee Jae Yong was granted pardon. In jail, he was not allowed to operate as Vice-Chairman of Samsung. Now that he has been pardoned, he could make main strategic selections, starting from governance reforms to chipmaking offers.

But how will South Korea transfer ahead to alter the vicious cycle of chaebol heirs getting away with mild sentences for his or her offenses? Professor of Economics on the Seoul National University Park Sang In recommends altering the wheels in movement.

Ultimately, these scandals and ethical problems with chaebol youngsters mirror the focus of financial energy of their fingers. They rule over the nation’s authorized system and even its politics. For a change, clear company governance and checks and balances are wanted, like banning executives who’ve executed mistaken from returning to govt posts as many different capitalist international locations have executed.

—Park Sang In

 



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