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All 15 Samsung Affiliates Complete Withdrawal From Lobby Group FKI

By February 10, 2017 at 6:10 am
Vice Chairman of Samsung Electronics Lee Jae-yong vowed to withdraw Samsung out of the FKI during a parliamentary audit in December. (Photo : Photo: BBC)

Following an earlier move by its parent company, all 15 affiliates of Samsung Group have expectedly withdrawn from the Federation of Korean Industries (FKI) on Friday, according to group officials. 

Samsung Electronics had submitted its withdrawal earlier in the week on Monday. Security solution provider S-1 Corp. completed the paperwork for the withdrawal late Friday, completing the exodus of all members of the conglomerate from the business organization.

The mass withdrawal is a huge blow for the FKI as the 15 subsidiaries accounted for a quarter of the organization's annual membership fees at around 13.3 billion won.

All 15 members, including Samsung Electronics, Samsung SDI, Samsung SDS, Samsung Engineering, Cheil Worldwide, Samsung Display, Samsung Electro-Mechanics, Samsung C&T, Hotel Shilla and Samsung Heavy Industries have notified the FKI last week of their intention to leave.

The move is part of the group's pledge to clean up after getting involved in a major political scandal.

The FKI, which was founded in 1961, is a lobby group for chaebols and allegedly has played a role in arranging corporate donations to Choi Soon-sil who is accused of bribery and abuse of power. The lobby group has been criticized for playing middleman in arranging donations for Choi and President Park Geun-hye.

Samsung allegedly made donations in exchange for guarantees for a smooth merger of its two affiliates. 
The Vice Chairman of Samsung Electronics and the conglomerate's de facto heir Lee Jae-yong vowed to take his company out of the lobby group when grilled at a parliamentary hearing in December.

That same month, LG Group became the first of the four big conglomerates in the country to pull out from the FKI. 

Samsung's departure from the FKI could lead to the possible dissolution of the once powerful lobby group as other companies appear to follow the lead of South Korea's biggest conglomerate. 

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