CEOs suspected of dodging audit

Questions are being asked about the recent swooping foreign trips of bosses of Korean conglomerates, for what their aides say is “business purposes.”

It is particularly curious that such trips are taking place at a time when the nation-wide parliamentary audit of institutions is in progress. There is suspicion that these trips are smokescreens to evade scrutiny by deputies.

It is reported that almost 150 CEOs and senior executives were summoned to appear before the audit committee to answer questions regarding rising income disparity, unemployment, labor-management disputes, and other economic issues.

A number of CEOs including Lotte Group Chairman, Shin Dong-bin, Shinsegae Group Vice Chairman Chung Yong-jin, Home plus CEO Lee Seung-han, Hana Financial Group Chairman Kim Jung-tae, and Woori Financial Group Chairman Lee Pal-seung, have reportedly served notices of their inability to appear before lawmakers, citing reasons of prior “unchangeable” overseas commitments for their respective inability to turn up.

But for their absence, these top corporate bosses would have been subjected to grilling sessions by lawmakers, especially regarding the widening income gap between big and small retailers.

Korea’s retail giants Lotte, Shinsegae and Hyundai among others have come in for criticism lately, over allegations of reckless expansion into segments hitherto dominated by smaller retailers and mom-and-pop stores. Such sentiments are expected to peak in the lead-up to the Dec. 19 presidential election.

Heads of financial firms are also out in their drones, apparently, for the same reason. They would have been fine targets of similar tough questioning in the wake of recent financial scandals like the CD rate-rigging scandal in July that dented the country’s financial credibility.

“It’s much harder for me to see CEOs than ministers during the audit,” complained independent lawmaker Roh Hoi-chan. Roh is a member of the State Affairs Committee that carries out audit on business-related affairs.

Companies say the absence of their bosses was unavoidable.

A Lotte spokesman said Lotte Chairman Shin left the country last week to deal with a “very important overseas schedule” this week. He insisted that Shin frequently travels overseas. The spokesman did not provide details about the said trip.

A Home plus spokesman said the company’s CEO Lee is attending an international meeting in London and his participation was confirmed as early as January. He said Lee departed for London last Friday and will return home on Oct. 26. The audit ends on Oct. 24.

By law, persons who refuse to attend the audit without a convincing reason face up to three years imprisonment or 10 million won in fine. Parliamentary officials said all the absent CEOs explained in writing their inability to turn up for the audit sessions. <The Korea Times/Park Si-soo>

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