The article is a worth a read.
The articles notes, in part, that:
"Now that it's likely to go through, the deal will embolden Korea's other family conglomerates -- known as chaebol -- to act even more selfishly than they do already. It's also sure to perpetuate the so-called "Korea discount," which depresses stock valuations relative to developed-market peers. That's the price for the sort of dodgy corporate governance regularly displayed by Samsung, Hyundai and other Korean companies.I suggest a read of the entire article at: Samsung's Win is South Korea's Loss
Corporate Korea needs to understand shareholder skepticism is a normal part of business, not an existential threat. Unfortunately, Korean companies are often abetted by a national media quick to indulge in xenophobia. Last year, Hyundai Motor Chairman Chung Mong Koo spent $10 billion, three times the assessed value, on land for a new corporate headquarters. When shareholders cried foul -- including Norway's Skagen Funds, the biggest holder of Hyundai preferred stock -- they were castigated by the media as meddling foreigners.
These issues contribute to Korea's other economic problems, including its inability to innovate. In recent months, much has been written, including in the New York Times , about Korea's latest startup boom centered around Seoul's Gangnam district. It's not all hype; venture capitalists from Silicon Valley are indeed eyeing the country's new mobile and Internet businesses. But they will all almost certainly hit Korea's chaebol ceiling. With deep pockets and even deeper political connections, the country's dynastic companies can easily scoop up any potential disruptor that enters the playing field.
Game-changing ideas regularly die inside the rigid, top-down, risk-averse institutions that dominate Korea's economy. So does any sense of corporate self-awareness. The Lees are pulling off this merger because it benefits the family, not Samsung's shareholders or the group's some 500,000 employees. South Korea's problem isn't foreigners or Jews. It's an economic system that insults its people's intelligence."
Sean Hayes may be contacted at: SeanHayes@ipglegal.com.
Sean Hayes is co-chair of the Korea Practice Team at IPG Legal. He is the first non-Korean attorney to have worked for the Korean court system (Constitutional Court of Korea) and one of the first non-Koreans to be a regular member of a Korean law faculty. Sean is ranked, for Korea, as one of only two non-Korean lawyers as a Top Attorney by AsiaLaw. Sean's profile may be found at: Sean C. Hayes