South Korea has been jolted by the untimely death of Chung Mong-hun, head of Hyundai Asan Corp who pioneered business ventures with the reclusive North Korea. The 54-year-old industrialist leapt to his death from a 12th story window of his corporate headquarters in downtown Seoul on Aug. 4.
A son of Chung Ju-yung, who died two years ago after founding South Korea's biggest heavy industrial conglomerate in a rags to the riches legend, the introverted junior Chung ran a small group of Hyundai business units that included shipping, electronics and securities. The mother company Hyundai Group controlled by his siblings spanning from shipbuilding to automaking to steel production, has paralleled the breathtaking development of South Korea as an industrial powerhouse in Asia.
But Chung Mong-hun earned a place in history promoting good relations with the North. In a show of respect rarely seen here for any businessman except probably for his father, thousands of mourners have burned incense before his photograph. One elderly refugee from the North was so distressed that he killed himself by drinking poison, news reports here said.
Chung's passing from the scene is expected to darken business prospects with the North. The Pyongyang regime officially expressed mourning, but it said Kumgang Mountain tours will be closed for nine days. It blamed the opposition conservative party in Seoul for "practically murdering Chung" by tormenting him with a special investigation into suspicions that he had illicitly transferred US$400 million as payment for exclusive business rights in the North. In Seoul, Chung has come under attack for making a 15 billion won (US$12.7 million) payment to President Kim Dae-jung's associates to grease the legislative engine driving his North Korean ventures.
These allegations have so troubled the local business community that they are backing down from discussion of any more ventures with the North. They are likely to stay away from discussing investment in North Korea's Kaesong Industrial Park, a project Chung had been pushing before his death. "Business ventures with the North aren't going to be attractive," said a business consultant here on condition of anonymity, "unless they were specifically backed by the [Seoul] government."
Trouble for Chung started three years ago when he began negotiating for big-ticket items with the North with blessings from then-president Kim Dae-jung, who was anxious to make progress on his "sunshine" policy of reconciliation. Chung subsequently stunned the world by signing a US$900 million contract with the North to bring tourists to Kumgang Mountain north of the Demilitarized Zone border.
But news of the North's nuclear program began causing global concern while tourists from the South declined. Chung began losing money as the government backed down from subsidizing tourists with budget allocations.
Meanwhile, Korea's Confucian obligation also added to Chung's problem. It was Chung Ju-yung who had willed that his son be given the task of opening economic ties with the North. The elder Chung, who was born in a small farming village of Tongchon in what is now North Korea, ever mindful of his debt to his birthplace, was determined to leave a shining legacy of his life by having his son lift his village (and the North) with investment from the South. In doing so, he was only following the well-known Korean custom of successful men honoring their birthplace or kohyang with a monumental project.
For junior Chung, it was a sign of filial duty to accept and fulfill this task. He devoted most of his time and resources developing projects with Pyongyang officials. They agreed to relink railways and highways to promote economic ties. He agreed to build an industrial park to invite foreign investment. But his preoccupation with the North was costing him dearly: Chung's assets shrunk from 400 billion won (US$338.7 million) three years ago to 20 billion (US$16.9 million) at the time of death.
His businesses in the South were unraveling under the impact of his profligate spendings: building hotels and resort facilities at Kumgang Mountain. But dwindling tourism receipts and large payoffs were driving him to a point of bankruptcy, press reports said.
He appeared to be ignoring the lesson that business is about making profit, not history. North Korea was beginning to undo his business. There's something uniquely Korean in this tragic saga of death and accomplishment: the mystical pull of Tongchon on the elder Chung's road to fame and success, Chung Mong-hun's obsession with North Korea blinding his path to destruction.
Even in his last note to friends and family, he appeared incapable of freeing himself from fascination with the legacy he was leaving behind: he asked that ashes from his cremated body be scattered over the Kumgang Mountain as a testament to his work. To his associates, he said the unfinished job of exploring business opportunity in the North be continued.
Shim Jae-hoon is a Seoul-based journalist.
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