| BUSINESSWEEK ONLINE : JUNE 14, 1999 ISSUE | ||||||||
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| INTERNATIONAL -- ASIAN COVER STORY
Lee Hun Jai: Veteran Troubleshooter (int'l edition) Lee Hun Jai says he takes his inspiration from Genghis Khan, but behind the tough image is a man more prone to meditation than marauding. ''Sometimes when I have to make a tough decision, I spend some time clearing my mind while lying on the floor or a table,'' says Lee. As the helmsman for Seoul's campaign to restructure its corporate and financial sectors, including cleaning up the debt-ridden chaebol, he has plenty of tough decisions to make. The Zen-like calm exuding from this 55-year-old veteran bureaucrat isn't what you'd expect from a man with the second most stressful job in South Korea, behind only President Kim Dae Jung. His is a daunting task, given the enormously powerful vested interests he has had to challenge. Lee, who spent decades inside Korea's finance ministry, is now dismantling the bureaucracy he once loyally served. As chairman of the Financial Supervisory Commission, Lee has already shuttered five regional banks and 55 unprofitable companies. With the full backing of President Kim, Lee is forcing economic change with an intensity not seen since the days of Park Chung Hee, the late dictator credited with transforming Korea into an industrial powerhouse. CORRIDORS OF POWER. Lee was drafted back to public service in December, 1997, by President-elect Kim, shortly after the International Monetary Fund agreed to rescue the stumbling Korean economy with $58 billion in bailout loans. Lee is a good choice, as he is no stranger to crisis. The U.S.-educated troubleshooter played a key role in helping the country survive a previous currency crisis brought on by the oil shock of 1974. But this bureaucrat also knows his way around the corporate corridors of power, having worked for two years in the early 1980s as right-hand man to the chairman of Daewoo Group. Lee helped dig Korea out of a hole early last year by helping convince international creditors to roll over loans. Then he tackled reforming the entire economy to meet the demands made by the IMF in exchange for its loans. He took to his task at the FSC with alacrity and quickly won a reputation as a straight-shooter. He has introduced laws to boost minority shareholder rights and implemented transparent accounting practices. But his initiatives weren't universally welcomed. At one point last year, the pressure got so great he had to shift from hotel to hotel in order to avoid threats. Lee hasn't let the pace slacken. If anything it's picked up. A few months ago, he ordered banks to cut off new credit to chipmaker LG Semiconductor when it reneged on a commitment to merge with Hyundai Group's rival subsidiary. That deal has since been signed, but LG's top management was so disgruntled at the shotgun marriage that it boycotted the ceremony to celebrate the merger. Such is the resistance to change in corporate Korea. More recently, Lee warned top chaebol that their credit would vanish if they insisted on simply revaluing their assets rather than selling some to bring down debt levels. PERFECTIONIST. But Lee isn't popping the champagne corks just yet. He's trying to complete the sale of two troubled Korean banks to foreigners, but wrapping up the deals is proving far tougher than expected. Lee also wants to push the chaebol harder to keep shedding assets and focus on the profitability of their operations rather than size. The mild-mannered bureaucrat has reached almost celebrity status within the country, yet he expresses surprise when people recognize him while on hiking trips around Seoul's mountains. He still remains focused on results rather than renown. ''I'm not 100% satisfied with the results, particularly on corporate restructuring,'' he says. ''Reform still has far to go.'' Yet even this perfectionist would admit his crusade is finally bearing fruit. Two of the biggest chaebol, Samsung and LG, are getting serious about reform. In April, Daewoo, one of the worst reform laggards, announced the sale of core units, including the world's second-biggest shipbuilder, to help pay down debt. Analysts say it may cue Hyundai, the country's biggest conglomerate and one that still seems bent on expanding, to follow suit. Lee is confident of final victory, predicting the market will tame the chaebol even if he can't. A modern-day Genghis Khan indeed. Says Lee, as he darts off to his next meeting: ''I admire his decisiveness.'' _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ BACK TO TOP |
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