Business-friendly policy

Tax dodgers, predators, rule-breakers are irksome

President Lee Myung-bak reaffirmed his business-friendly policy Tuesday in a meeting with business leaders. It was reassuring for Lee to adhere to the policy. The pro-corporate policy should not mean the protection of rule-breakers, tax dodgers and corporate predators, however.
Lee invited the CEOs to Cheong Wa Dae as skepticism was rising over whether Lee???s pro-business policy was getting off track. Business leaders raised questions after Lee???s senior secretary aired the possibility of mobilizing the National Pension Service to tame leading companies, including Samsung and POSCO through exercising its voting rights. It is rare for such institutional investors as the fund to participate in company voting. The fund is equipped with a powerful tool as it could foil key corporate decisions, including the naming of CEOs, with its heavy shareholding in some major listed companies.
Business groups also fretted over the profit-sharing program between large and small companies. Big enterprises view this as an attempt to socialize profits.
CEOs need to pay heed to the background of such proposals. The recent business boom is just a party for a few conglomerates. A few tycoons apparently get confused between pro-business policies and proper business ethics.
It is no exaggeration to say that many tycoons have transferred corporate ownership and wealth to their offspring without paying appropriate taxes. This scheme does not get the attention of the tax office and the prosecution. This unethical and illegal business practice will surely get the attention of the next President. Authorities winked at some illegal practices under Lee administration???s business-friendly policy.
The Lee government has scrapped business areas that were exclusive for small-and medium-sized enterprises. Division of labor between large and small firms is no longer possible. Big enterprises such as Lotte and Shinsegae have cornered back alley mom-and-pop shops and traditional-market merchants through their predatory business practices.
Chaebol sometimes buy innovative technologies which small firms develop. Big exporters squeeze out profit margins of subcontractors. These greedy and predatory practices have left little room for small firms to survive even under the booming economy.
The government agencies, including the National Tax Service, the Financial Supervisory Service and the Fair Trade Commission, have often been timid and toothless in enforcing rules to promote fair competition. Tax dodgers and breakers of fair-market rules have been increasing on the back of the pro-business policy.
It may be a luxury for Koreans to expect the emergence of philanthropic-corporate leaders like Bill Gates and Warren Buffet. What Koreans want from tycoons is that they abide by rules and laws in doing business and paying due taxes. They should not abuse the pro-business policy. Despite their emergence as the world???s leading manufacturers of chips, cars, ships and electronics products, Korean tycoons??? mentality and the way of thinking about their wealth is quite anachronistic and outdated.
Another question is why foreign direct investment has been falling under the Lee administration. The business-friendly policy should benefit both small and large companies as well as foreign investors. It should not be only for a select few conglomerates.