Foreign Capital and Chaebol Under Scrutiny

May 2006 | Business Environment Outlook

Two recent developments have put South Korea's business environment in the spotlight. Firstly, the National Assembly has revised its tax law to close a loophole that has allowed foreign funds to make tax-free profits from buying and selling domestic assets. Secondly, Hyundai Motor chairman Chung Mong Koo was arrested following accusations that he had built up a slush fund for the purposes of bribing government officials. Taken together, the two events serve as a reminder to foreign investors of two of South Korea's long standing weaknesses; an apparent hostility to foreign takeovers, and corruption within the chaebol, the conglomerates which

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