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Business

Lotte probe exposes flaws of Korea Inc

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Opening sequence

Business

Lotte probe exposes flaws of Korea Inc

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COMING UP:Lotte probe exposes flaws of Korea Inc

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00:00:02
>> Is it loyalty before the law in South Korea? A suicide note left by a senior executive for the Lotte Group last week casting Korean corporate culture in a grim light. Just hours before Lee In Won was due to meet with prosecutors over an on going criminal probe, he hung himself, leaving behind a letter praising his boss and defending the company.
00:00:22
Critics are calling for more transparency and less blind loyalty in the chaebol, or big family run conglomerates. Reuters Joyce Li says that will be hard.>> They make new hires go through very difficult rites of passage, and coupled with one of the longest working hours in the OECD, as well as how chaebol jobs are seen as very culturally desirable and well-paying.
00:00:47
It's no wonder that chaebol employees associate their identities with their jobs.>> Lotte Group isn't the only one under the microscope. Asia's fifth largest economy is dominated by chaebol who've run into trouble with the law. Wary investors trade the country's shares at what they call the Korean discount, meaning they sell cheap because of questions around transparency and governance.
00:01:10
Meanwhile, change is slow.>> One of the problems that still remain are how chaebol boards don't really dissent. According to the recent data, there have been outside directors at chaebol boards have agreed with the agenda nearly 100% of the time.>> Critics say another flaw in the culture of Korea Inc., rule breakers who get off too easy.
00:01:38
The Chairman of Samsung and Hyundai Motor have both been convicted of crimes, but had their sentences suspended, and were later pardoned by the President.