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Asian Cover -- Opinion Shapers
KOREA'S JANG HA SUNG (int'l edition)
Korea University economist Jang Ha Sung spends his free time climbing mountains and raising orchids. In these solitary moments, the 45-year-old shareholder activist wonders how South Korea will be reshaped following Asia's economic crisis. If he has his way, all Korean companies, particularly the giant chaebol, will be run with shareholders in mind and have less opportunity to load up on debt and overexpand.
After a slow start, Jang is getting results. As head of a grass-roots advocacy group, People's Solidarity for Participatory Democracy, he is using the courts and shareholder meetings to push for change. Formed in 1994 by Jang and others, the group struggled for years to be heard. Now, with Korea in crisis, the group is gaining in popularity and has the backing of President Kim Dae Jung.
In a major victory, Jang's group has put a halt to the common chaebol practice of shifting funds from successful operations to prop up losers. Their first target was SK Telecom Co., a mobile-telephone operator. Jang lobbied shareholders and foreign fund managers who put pressure on the company to end a complicated cross-subsidization scheme. "This is just the first step," says Jang. "We have a long way to go for shareholders to play a role in the market."
An activist in his student days, Jang then took a stab at business. In fact, in the 1970s, the wiry Jang was at the forefront of Korea Inc.'s export drive. As a salesman, he traveled around the world selling car batteries, shoes, and textile products. Disgusted by the chaebol abuses and mismanagement he witnessed, he studied in the U.S. to learn how to fight the corruption back home. He returned to battle the chaebol in newspaper articles, academic treatises, and public debates.
Jang's next targets, through court action, are Samsung Group's controversial plunge into the auto business and Korea First Bank's lending practices. Whether he wins those fights or not, he has Corporate Korea starting to pay attention to its shareholders.