LH scandal and conflict of interest in public sector

 The latest impropriety to roil the Moon jae-in government pertains to irregularities by Korea Land & Housing Corp. (LH) employees regarding large urban development projects near Seoul. State-owned LH was established in 2009 as a comprehensive organization responsible for the development, construction, renovation and management of land, housing properties and cities in South Korea. Since then, it has developed residential areas, new towns and industrial complexes, including the inter-Korean Kaesong industrial park in North Korea. Earlier this month, two civic groups – People’s Solidarity for Participatory Democracy and Lawyers for a Democratic Society -- alleged that LH employees bought land worth about 10 billion won ($8.88 million) in the cities of Gwangmyeong and Siheung in Gyeonggi...

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GameStop frenzy amid shorting debate in Korea

 Retail investors across the world, including South Korea, were captivated recently with the revolt targeting short selling by Wall Street hedge funds, which jacked up the stocks of a few firms, video game retailer GameStop in particular. Shorting refers to transactions when an investor borrows stocks and sells them soon in hopes of buying back later at a lower price, taking advantage of perceived arbitrage opportunities. In the case of GameStop, institutional short sellers got very greedy. They bet against the game retailer and hoped its price would plummet by shorting more stocks than were available through its float. Frustrated at watching the manipulations by big fish to rake in moolah, retail investors banded together -- through online brokerage apps and anonymous social media...

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Indo-Sino conflict in context of S. Korea’s problems

 China recently blocked Indian websites and e-commerce platforms in retaliation for India’s move to ban 59 Chinese apps and prevent Chinese companies from participating in infrastructure projects.It is laughable, given that Facebook, Google and LinkedIn have been blocked in the mainland for years -- my friends there throw their hands up in exasperation as they have to only use local social media platforms -- and the country is now also blocking virtual private networks.The Cold War between the “Dragon” and the “Elephant” will last long, as China thinks India is moving closer to the US in geopolitical terms.The latest standoff was sparked by a clash between soldiers in the northernmost Indian territory of Ladakh. Twenty Indian soldiers died, but as usual the Chinese haven’t revealed how...

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Korean Air, Asiana face turbulent tailwinds

 South Korea’s main flagship air carriers appear to be facing strong headwinds at the same time and it is worrisome.Korean Air and Asiana Airlines are embroiled in their own difficulties, and it is all connected to the typical family-owned conglomerate management system that is so prevalent here.While there have been calls for chaebol reform over the past years I have been here -- starting with Roh Moo-hyun administration -- there have been no drastic changes so far.I have always admired Roh, and think he genuinely tried to reform chaebol governance and the prevalent system -- but even he was not successful and got bogged down by the entrenched system.That aside, I am referring to the problems faced by Hanjin Group and Kumho Asiana. Their problems are different, but not completely. It...

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Is Korea’s launch of world’s 1st 5G services hype?

 The next-generation wireless network technology 5G is in the limelight as South Korea is poised to beat the United States as the first to cross the finish line.Tech giant Samsung Electronics has said it will launch its Galaxy S10 5G device in collaboration with the nation’s largest telecom operator SK Telecom on Friday, beating US telco Verizon, which is scheduled to launch its fifth-generation services across the country on April 11.But how exactly will 5G telecom services benefit consumers? Why this rush to be the world’s first?It will make no material difference if services are below par, and going by the palli-palli (fast-fast) Korean culture, I am sure many Samsung and SKT executives are trembling to launch services by the given deadline. Remember the Galaxy Note 7 fire fiasco when...

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S. Korea-India economic ties need more heft

 It is now nine years since the South Korea-India Comprehensive Economic Partnership Agreement -- a de facto free trade agreement -- went into effect. However, while much progress has been made, there is still a long way to go for economic ties to reach their potential.It was widely anticipated that the CEPA, which came into effect in January 2010, would lead to more bilateral trade and investments. South Korea abolished tariffs on 93 percent of Indian imports and India has done the same on 75 percent of Korean imports. Besides, the agreement sought to increase the interactive trade account, as it includes investments in various sectors like goods, services and even intellectual property.They have since set a target to increase bilateral trade to $50 billion by 2030 from around $25...

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India’s demonetization and Korea’s currency reform

India’s Prime Minister Narendra Modi stunned the nation when he made a public announcement at 8 p.m. on Nov. 8 that 86 percent of the currency in circulation -- 500-rupee (US$7.40) and 1,000-rupee notes -- would no longer be legal tender at the stroke of midnight. The ostensible reason for this was to fight rampant corruption and the underground economy along with counterfeit notes printed by Pakistan to fuel terrorism in India. He asked the Indian citizens to bear the short-term inconvenience for long-term benefits that would accrue to the economy. While the public has by-and-large supported the move, the anti-Modi cottage industry and opposition politicians have been very critical. Sure, the public has been inconvenienced because the central bank did not ensure that adequate replacement...

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Samsung's Note 7 fiasco and perils of 'ppalli-ppalli' culture

First published in The Korea Herald. The last few weeks have been tumultuous for tech giant Samsung Electronics, as it has been knocked down by the battery explosions of its latest flagship smartphone Galaxy Note 7 across the globe. Samsung recalled 2.5 million Note 7 smartphones in September 2016 after a number of the units spontaneously burst into flames. Faulty batteries were blamed at first, and it issued replacement phones it claimed were safe. However, some of the new phones suffered the same problem, and the firm asked consumers to switch off their Note 7s on Oct. 11. All production and sales of Note 7 handsets has now been stopped, and the model has been withdrawn from the market. South Korea’s No. 1 conglomerate is still struggling to recover, having initially regained composure...

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Government role in corporate debt restructuring

First published in The Korea Herald. The hot topic in Korean corporate circles today is undoubtedly the moves by the government and state-run policy banks to bail out the ailing shipbuilding and shipping companies. Given the importance of these sectors in Korea and their prolonged financial distress, it is understandable that the government has pushed the panic button. The process of bailing them out has been set in motion with some sort of consensus reached between the Finance Ministry and Bank of Korea. BOK Gov. Lee Ju-yeol has cautioned against the central bank mobilizing its power to print money in the ongoing corporate restructuring. He was echoing the sentiments of critics, who have raised worries over the government’s possible misuse of the money-issuing authority. The current...

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Amending retail price maintenance rules

First published in The Korea Herald. The Korea Fair Trade Commission is all set to take a decision on amending the “Guidelines for Review of Resale Price Maintenance” as the public comment period has just concluded. Resale price maintenance, or RPM, is a system in which the manufacturing firm determines and enforces the price at which distributors resell its products. Hence, it is also known as vertical price-fixing, price protection, or the practice of imposed prices. Until now, RPM has been deemed illegal in Korea, and companies that are caught engaging in this practice are fined heavily by the antitrust agency because it is considered anticompetitive. The proposed amendments will allow RPM under certain conditions, more specifically if it “enhances consumer welfare.” It will still be...

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