It ordered the chaebol to reduce debt, sell businesses and increase transparency. While much remains to be done, Seoul is steadily putting a stop to business as usual. If companies continue the process of adopting global business standards, the nation's capital markets will benefit.
Against that backdrop, it's easy to see why the LG Group's stock shenanigans unnerved investors. Thankfully, markets wasted no time in letting LG family members know they'd fouled up. By acting as disciplinarians, investors could keep other conglomerates from thinking they too can get away with similar back-room transactions.
Nevertheless, there's more good afoot in South Korea's economy these days than bad. General Motors Corp and other investors at long last agreed to buy Daewoo Motor Co assets for US$1.17 billion in cash and assumed debt. The pact ends a four-year effort to salvage the bankrupt South Korean automaker.
Also in the news this week is Hynix Semiconductor Inc's rejection of Micron Technology Inc's bid to buy the chipmaker for US$3 billion. The unanimous decision by Hynix's board of directors was a setback, especially in the eyes of investors.
Unloading the huge companies on the government's balance sheet is key to convincing the world that the influence of militant labor unions and monopolies is waning. In short, that South Korea has changed. Recent events offer reminders that more needs to be done.
Yet the most important indicators of change are often in disguise. LG Group's recent stock transaction left little doubt that South Korea really is changing.
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