Korea had already experienced a series of bankruptcy filings by chaebols during the Asian financial crisis from the late 1990s until the early 2000s, when H Group, J Group and K Group went bankrupt one after the other. In some other chaebols, all decision-making was suspended due to the criminal prosecution of chief executive officers. At the moment, all of the chief executive officers of T Group, S Group, H Group and C Group have been criminally prosecuted or are involved in a criminal trial. H Group was investigated by the National Tax Service and the Prosecutor's Office.
Following the case of D Group, which had a disturbing effect on the Korean financial market in 2013, criminal trials are now pending against some of officers and employees on the charge of fraudulent issuance of corporate bonds and corporate papers. The outcome of these criminal cases is likely to directly affect mediation cases of financial disputes pending before the Financial Supervisory Service or civil cases before the courts filed by a large number of interested people.
Against this backdrop, there has been analysis of, and solutions suggested for, the significant issues associated with Korean chaebols. A particular focus is on how bankruptcy filing by a group is related to cross-shareholdings. Further, based on the analysis of the actual leverage ratio of chaebol groups, it has been suggested that such problems derive from the excessively leveraged management of certain groups.
Bankruptcy filing by chaebol groups and criminal trials against their chief executive officers are making a substantial impact on the Korean economy. A number of experts believe that if the problems associated with chaebol groups are open to public discussion and debate, their corporate governance may be reformed, which may have a positive effect on the Korean economy as a whole.