Wednesday, June 5th, 2013
SEOUL, KOREA - CJ Group chairman Lee Jay-Hyun said, "I will hold myself accountable for everything if there is anything that I have to take responsibility." He said this in an email message sent out in the early morning of June 3 to the employees of CJ Group. "I will do everything I can to minimize repercussions to the company and our people," he added.
His message is widely interpreted as the group acknowledging it is in a serious trouble. Recently CJ Group has been under investigation for offshore accounts allegedly used to inflate the group companies' share prices. In addition, his two children have been mentioned in the media of late for receiving a vast sum of money from their father without reporting it for gift taxes.
To add insult to injury, the group affiliates' performances have been going downhill. For example, the group's flagship company CJ CheilJedang saw its first-quarter operating profit decline 20.95 percent to 125.2 billion won from 158.4 billion won a year ago. Due to a strike, CJ Korea Express suffered a 60.77-percent plunge in its first-quarter operating profit to 14.2 billion won from 36.2 billion won in the same quarter last year.
As for the group's food franchise business unit CJ Foodville, it faced a wall in expansion within the domestic market after the National Commission for Corporate Partnership ruled that franchise restaurants owned by large corporations be established only within the 100-meter radius of a subway station.
Under these circumstances, observers commented, the tightening investigation on the owner's family by the prosecutor's office may weaken his control. A CJ Group official said, "This is like the lull before the storm. Every one of us is worried about what's going to happen."