Roh pledges to ease regulations

Jon · Korean Citizen Joined: Mar 19, 2004 Posts: 512

Business community promises to boost investment, employment
President Roh Moo-hyun promised yesterday to relax regulations if necessary to boost the sagging economy and corporate investment, and to establish a government task force to that end.

Roh also pledged to give priority to technological innovation and training when he met with 18 business leaders, including 15 owners of leading conglomerates, in the presidential office to discuss measures to brighten the nation's economic outlook.

"If a specific regulation issue is raised, I will boldly ease any (regulations) that have to be addressed," Roh said. "The business sector needs to find out specific and individual cases and we need a mechanism for consultations between business and government."

To work out the necessary policies, the president said he would create and supervise a government body involving the related agencies or a subcommittee under the Regulatory Reform Committee.

President Roh Moo-hyun (right) speaks during a meeting of a group of business tycoons to discuss economic recovery at Cheong Wa Dae yesterday. From left are Hyundai Motor chief Chung Mong-koo, LG head Koo Bon-moo and Samsung chief Lee Kun-hee. [The Korea Herald]

But Roh asked the owner-chairmen to accept regulations that prohibit large business groups from holding large stakes in affiliate companies.

"Regulating total cross-equity investment is a global trend and it is also what the public wants," Roh said.

The president's meeting with the business leaders, the first since he was reinstated May 14, came after the Fair Trade Commission promised to eradicate illegal business practices on the part of conglomerates and restrict their investment rights.

Under the current regulations, 18 conglomerates with total assets exceeding 5 trillion won are banned from buying stakes in affiliates or third-party companies in excess of 25 percent of their net combined assets.

At the meeting, the leading conglomerates vowed to expand investments and employment.

Participants in the meeting included Samsung Chairman Lee Kun-hee, Hyundai Motor Chairman Chung Mong-koo, SK Chairman Chey Tae-won and Lotte Vice Chairman Shin Dong-bin.

In response to the Cheong Wa Dae meeting, the business community pledged a sharp increase in corporate investment, seeing a chance to mend relations with the government, which had gone sour over disagreements on corporate reform and other issues.

The top 15 chaebol, or family-owned conglomerates, promised to invest a combined 46 trillion won, an increase of 34.2 percent from last year and the largest year-on-year growth since 1995. The government had long sought expansion of corporate investment as essential to reviving the economy and creating jobs.

Speaking on behalf of the 15 groups, Kang Shin-ho, chairman of the Federation of Korean Industries, said the pace of corporate investment appeared to have picked up since the April 15 general elections.

Following the meeting, Samsung Group, Korea's biggest industrial group, said it would announce plans to increase investment and hiring on May 27. "We will not only move up the implementation of planned investment but substantially increase the size of investment and hiring," a Samsung executive said.

LG Group, the nation's No. 2 industrial group, said it would map out more concrete investment plans as part of its goal to rank among the world's top three electronics and information companies by 2010.

Hyundai Motor and affiliate Kia Motors said they were pushing for a 5.8 trillion won investment plan this year and would hire 1,200 new university graduates, the same as last year.

POSCO, Korea's largest steelmaker, said it was set on allocating 80 percent of its 13.5 trillion won investment planned over the next five years to the upgrade of a local steelmaking facility and hoped to create 70,000 jobs as a result.

(shj@heraldm.com)

(mhkim@heraldm.com)

By Seo Hyun-jin and Kim Min-hee