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Cheong Wa Dae Raps Samsung Chairman's Comments over Profit-sharing System
Senior presidential officials expressed regret on March 11 over Samsung Electronics Chairman Lee Kun-hee's thinly veiled criticism against a proposal to introduce a profit-sharing system between conglomerates and their subcontractors here as part of efforts to balance their growth.

It is unusual for top Cheong Wa Dae officials to take direct aim at a powerful head of South Korea's family-owned conglomerates known as chaebol. Lee, who has guided Samsung Electronics to become a major global company, is arguably an icon of South Korea's business world.

Lee stepped into simmering disputes over a recent suggestion by Chung Un-chan, former prime minister who now leads the Commission for the Shared Growth for Large and Small Companies, that large businesses share some of their large profits with their subcontractors.

Chung's proposal drew harsh criticism from some conservative lawmakers who brand it as a sort of socialist or communist policy. Chung later tried to ease the controversy by toning down his position that the system, if adopted, will be implemented on a voluntary basis.

The Samsung Group leader, who is known to be reticent in public, on Thursday alluded to his strong opposition to Chung's idea.

"I grew up in an entrepreneurial family and I studied economics at school, but I have never heard of the word 'profit-sharing' and I simply don't understand what it is or what it means," Lee told reporters before attending a monthly meeting of the executive board of the Federation of Korean Industries, the largest business lobby in South Korea.

Cheong Wa Dae revealed no immediate formal position on the tycoon's remarks carried in major newspapers but senior officials were not as guarded.

"The mood is not good inside Cheong Wa Dae over Chairman Lee's remarks," a senior Cheong Wa Dae official told Yonhap News Agency by phone, requesting anonymity. "Are they uncomfortable to hear?"

Another ranking Cheong Wa Dae official also said it was ununderstandable for the Samsung chairman to make such remarks in public at a time when President Lee Myung-bak, who was a business CEO himself, was endeavoring to create a business-friendly climate.

The president is making simultaneous efforts to lay the groundwork for the joint growth of conglomerates and smaller businesses.

Many conglomerates here have long been accused of unfair treatment of subcontractors, prospering through huge exports and growing domestic market shares, while small- and medium-sized companies suffered financial troubles.

The president vowed to address the problem in strict accordance with market principles.

Presidential aides said the Samsung head's remarks were deemed as blunt opposition to the government's initiative.




 

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