South Korea’s conglomerates implicated in bribery scandal of former president Park Geun-hye this year upped recruitment of retired officials from the presidential office, law enforcement, tax agency, and financial authority as their outside directors.

Daishin Economic Research Institute’s corporate governance research team upon studying the appointments that passed the shareholders’ meetings in March charged that Korea’s top conglomerates Samsung, SK, Lotte and SK Group seated former government officials as outsider directors in replacement of executive-level positions.

They were mostly recruited from the Financial Services Commission, law enforcement authorities including the prosecution.

The chaebols may have sought out senior bureaucrats from powerful agencies to reinforce dialogue and lobby channel after their owners came under prosecution probe and court trial on bribery charges.

CJ Group appointed five new independent directors and one auditor in its six affiliates, which increased the ratio of new outside director appointments to 60 percent. The move seemed to be part of management overhaul before the group Chairman Lee Jae-hyun returns to the helm after four years of absence due to imprisonment for criminal wrongdoings. But at the same time, the move could also be aimed at preparing for the upcoming investigation on an allegation of providing funds to institutions run by former president Park`s close friend Choi Soon-sil in return for a presidential pardon for its imprisoned chairman.

Lotte Group also added nine new outside directors and one auditor with the rate of new appointment reaching 58.8 percent. SK Group and Samsung Group’s appointment ratio of new outside directors reached 56 percent and 34.6 percent, respectively.

Of them, about 42.8 percent of Samsung Group’s new outside directors have an experience of serving in government authorities, compared to 10 percent last year. Samsung heir Jay Y. Lee is arrested on bribery charges in connection with the group’s donations to private organizations run by Choi. CJ Group also hired two ex-government officials as outside directors out of five and SK Group recruited four out of 13.

By Yoon Jin-ho, Lee Yong-gun and Park Yoon-gu

[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]