Happy hour? Craft beer, no ties as S.Korea's leader hosts business tycoons (updated)

Otoki

27/07/2017 12:37

* First such event between president and conglomerates 
    * President says "no script, no theme" for free conversation 
with executives 
 
 (Updates with comments from president, executives) 
    By Hyunjoo Jin and Christine Kim 
    SEOUL, July 27 (Reuters) - Craft beer, finger food and bowls 
of rice replaced a full-course meal on Thursday as South Korean 
President Moon Jae-in played host to corporate tycoons for the 
first time since his election in May. 
    Against the casual backdrop, Moon had more serious business 
at hand, as he pushed his message of corporate reform to deliver 
on a campaign pledge to curb the power of the conglomerates that 
dominate South Korea's economy. 
    The event at the presidential Blue House was a departure 
from previous meet-and-greets, where corporate bosses in dark 
suits and ties typically sat and listened to presidents speak. 
    Moon proposed a no-tie, no-jacket dress code to free up 
conversations. 
    "We hosted this event because I wanted to fully hear from 
you all," Moon said in his welcome to company officials. "There 
is no script, no theme, no time limit and no handout materials." 
    Instead of hosting the 15 corporate leaders in the imposing, 
main building where such events usually take place, Moon's 
guests were taken to Sangchunjae, a scenic Korean-style house 
with a garden, in the grounds of the Blue House. 
    In the casual setting, some aired gripes over economic 
hardship, such as retaliation by China for the deployment of a 
U.S. anti-missile radar system in South Korea, which Beijing has 
vehemently protested. 
    "All the Chinese tourist groups in our duty-free shops have 
evaporated," said Shinsegae Group Chief Executive Chung 
Yong-jin. 
    China was refusing to buy South Korean batteries for 
electronic cars, added LG Electronics Inc  066570.KS  Vice 
Chairman Koo Bon-joon.      
    But the two days of meetings will probably be anything but 
comfortable for the leaders of the conglomerates, the top 10 of 
which account for more than half of the stock market's value, 
according to the Korea Stock Exchange. 
    Moon said he will break close ties between government and 
businesses in the wake of a corruption scandal involving his 
impeached predecessor Park Geun-hye and Samsung  SAGR.UL , the 
largest of the powerful family-run conglomerates, or chaebols. 
    Jailed Samsung leader Jay Y. Lee will not be at the meetings 
with Moon while on trial charged with bribery and embezzlement 
in the Park scandal. Samsung Electronics  005930.KS  Chief 
Executive Kwon Oh-hyun will attend instead. 
    Lotte Group Chairman Shin Dong-bin, who has also been 
charged with bribery in the Park case, is due to attend. Shin, 
who attends sessions of his trial on Thursdays and Fridays, has 
received court permission, a group spokesman said. 
     
    WISH LIST 
    Participants enjoyed craft beer made by local brewery 
Sevenbrau at the event, attended by the chairman of food company 
Ottogi  007310.KS  as the only representative of mid-sized 
companies. 
    Shares of Ottogi rose 8 percent this week on news of the 
invitation, while Moon lauded its high proportion of regular 
workers. 
    Moon wants chaebols to create more full-time jobs, improve 
working conditions and stop using dominant market positions to 
squeeze small and mid-size suppliers. 
    He has also talked of raising taxes for the largest 
conglomerates to fund economic stimulus plans and welfare 
packages. 
    Days before the Blue House event, companies such as Samsung, 
SK Hynix  000660.KS  and flat-screen producer LG Display 
 034220.KS , announced big investments, new jobs and plans to 
help suppliers. 
    "It is positive that a person in authority tries to have an 
unassuming demeanor. But businesses will come under pressure to 
create more jobs," an official at food-to-entertainment giant CJ 
Group told Reuters, asking not to be identified because of the 
sensitivity of the matter. 
    CJ, South Korea's 15th biggest conglomerate by assets, has 
said it will convert about 3,000 contract workers into regular 
employees. 
     
    CHANGING OF THE GUARD 
    Several chaebol chiefs, who attended meetings with Moon's 
predecessor, were absent and represented instead by their sons 
or chief executives. 
    Samsung chairman Lee Kun-hee has been hospitalised since May 
2014 following a heart attack and a Hyundai Motor Group Chairman 
Chung Mong-koo, 79, did not attend due to a flu, his only son 
and Hyundai vice chairman, E S Chung, said at the meeting. 
    Asked by Moon if the company had suffered recently due to 
poor demand in China, Chung admitted, "The situation is 
difficult." 
    Hyundai Motor posted its smallest quarterly net profit in 
five years on Wednesday, missing estimates, and warned of a 
challenging second half as political headwinds hit China sales  
and U.S. demand remains slow.  urn:newsml:reuters.com:*:nL3N1KF2DX 
    The average age of the 15 leaders is 61, down from 69 at 
Park's first meeting with top business leaders in 2013. 
    "Moon seems to be trying to shrug off his "anti-chaebol" 
image through this casual setting," said Park Ju-gun, the head 
of corporate analysis firm CEO Score. 
 
 (Additional reporting by Haejin Choi; Editing by Soyoung Kim 
and Clarence Fernandez) 
 ((hyunjoo.jin@thomsonreuters.com; 82-2-3704-5685; Reuters 
Messaging: hyunjoo.jin.thomsonreuters.com@reuters.net)) 
 
Keywords: SOUTHKOREA POLITICS/MOON COMPANIES (UPDATE 1, PIX