Tired of Corruption but Afraid of the Crackdown
By CHOE SANG-HUN
New York Times
HWASUNG, South Korea, Dec. 3 — For Choi Hae-pyung, head of an electronics parts maker, running his business over the last year has been like steering a boat through a double storm: competition from China and the rising value of the Korean currency have squeezed his already thin profit.
But those challenges were anticipated. What Mr. Choi did not foresee was a scandal.
For weeks, the manufacturing giant Samsung, which relies on thousands of parts suppliers, like Mr. Choi’s Green C& C Tech here, has been battered by accusations of corruption. Executives were banned from leaving the country. Prosecutors raided Samsung’s offices in search of traces of a suspected slush fund that was said to exceed $217 million.
“Everyone is watching what’s going to happen to Samsung,” Mr. Choi said. “If Samsung takes a punch, we feel the shock, too. If Samsung shrinks because of the investigation and cuts its investment, smaller companies like us will shut down in droves.”
Mr. Choi’s jitters help to explain why virtually no one in this country maintains that despite the enormity of its recurring scandals, Samsung should go the way of Enron.
South Koreans have grown tired of the corrupt ways of their big businesses. But because the economy is so heavily dependent on a handful of conglomerates, and their influence so pervasive in people’s daily lives, Koreans fear that striking these behemoths too harshly may hurt their own economic well-being.
Thus it has become a pattern: a scandal rocks one of these conglomerates, known as chaebol, roughly once a year. But by the time the scandal has run its course, executives accused of bribery walk away with light punishment, usually a suspended prison term accompanied by an admonition from the judge that they would have been punished more sternly were it not for their “contribution to the economy.”
(Continued here.)
New York Times
HWASUNG, South Korea, Dec. 3 — For Choi Hae-pyung, head of an electronics parts maker, running his business over the last year has been like steering a boat through a double storm: competition from China and the rising value of the Korean currency have squeezed his already thin profit.
But those challenges were anticipated. What Mr. Choi did not foresee was a scandal.
For weeks, the manufacturing giant Samsung, which relies on thousands of parts suppliers, like Mr. Choi’s Green C& C Tech here, has been battered by accusations of corruption. Executives were banned from leaving the country. Prosecutors raided Samsung’s offices in search of traces of a suspected slush fund that was said to exceed $217 million.
“Everyone is watching what’s going to happen to Samsung,” Mr. Choi said. “If Samsung takes a punch, we feel the shock, too. If Samsung shrinks because of the investigation and cuts its investment, smaller companies like us will shut down in droves.”
Mr. Choi’s jitters help to explain why virtually no one in this country maintains that despite the enormity of its recurring scandals, Samsung should go the way of Enron.
South Koreans have grown tired of the corrupt ways of their big businesses. But because the economy is so heavily dependent on a handful of conglomerates, and their influence so pervasive in people’s daily lives, Koreans fear that striking these behemoths too harshly may hurt their own economic well-being.
Thus it has become a pattern: a scandal rocks one of these conglomerates, known as chaebol, roughly once a year. But by the time the scandal has run its course, executives accused of bribery walk away with light punishment, usually a suspended prison term accompanied by an admonition from the judge that they would have been punished more sternly were it not for their “contribution to the economy.”
(Continued here.)
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