Hostile takeovers could bring better management, but they are made difficult by a strong bias against foreign domination of local companies. In the end, responsibility lies with shareholders to force improved corporate governance. But they are often reluctant to vote at shareholder meetings, let alone file lawsuits against chaebols. Jang Ha Sung, a prominent chaebol critic, was rebuffed recently when he asked Korean investment-trust companies to vote against a chaebol's management at a shareholders' meeting. The companies were worried they would lose the chaebol's business, Jang says.
Foreign shareholders tend to remain passive investors.
But he perks up when he recalls how tough things were when he started his campaign. Now at least people are talking about the need for change. Unfortunately, it may require another corporate collapse to turn that talk into action. Review Publishing Company Limited, Hong Kong. All rights reserved.