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- Home > News > News Articles
| Title | [Forbes Korea] "Businesses should not be a burden to church members" | |||
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| Date | 2009-12-23 | Hit | 7515 | |
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The following excerpt of an interview with Kook Jin Nim, Chairman and CEO of the Foundation for the Support of HSA-UWC, was published in Korean the June 2009 issue of Frobes Korea. --editor  (Photo by Jae Young Choi / Forbes Korea) Businesses Should not Be a Burden to Church Members Why did he accept the post of the CEO of Tongil Group? "My father asked me to. Korea's Tongil Group was continuing in difficult circumstances, and he needed someone he could trust and put in charge. Our doctrine emphasized harmony within the family, so it was only nature for me to obey him." Before CEO Moon took over in 2005, Tongil Group was in such a dire state that there was concern over the possibility of a second round of bankruptcies. The Group faced possible bankruptcy in 1998 during the Asian financial crisis, when five of its core companies including Tongil Heavy Industries were placed in court receivership and many other affiliated companies were closed. The Group was on the verge of disintegrating. With donations from overseas followers, the Group barely managed to repay hundreds of billions won in debt and survive the crisis. With the onset of the new millennium, the Group tried to reestablish itself by acquiring a number of companies, including Yongpyong Resort. Even then, most of its affiliated companies could not escape chronic and structural deficits. In 2004 the Group recorded an operating loss of 40.9 billion won on sales of 623.4 billion won, with a debt to equity ratio of 767 percent. In reality, it was losing its value as an ongoing business concern. "Tongil Group established companies for evangelical purposes, so in reality it has never made a profit in the past 40 years, not just during the Asian financial crisis," CEO Moon said. In fact, Tongil Group is a company centered on religious activities, such as providing jobs to Unification Church members and engaging in businesses that meet Church needs. Even the reason the Unification Church is reorganizing around the resort business is related to a statement by Rev. Sun Myung Moon: "The only possible way to taste the Kingdom of Heaven on earth is by relaxing in resorts or through sports activities." CEO Moon draws the line with these words: "It is clear that Tongil Group should play the role of supporting the church (Unificationism), but running money-losing businesses does not help evangelism." "Companies run for evangelical purposes should nonetheless be run by professional financial managers in accordance with principles of business management. There have been many cases where the problems of a company were not well understood, proper reports were not made, necessary systems were not in place, and then one day it would suddenly go bankrupt. A company created to help Church members should not be a burden to them, should it?" His statement carries great significance. His meaning is that he draws a definite line, separating himself from the strongly religious era of his father and its emphasis on expanding the church. He is now talking about transparency and systems, topics that no one in the Unification Church could dare to speak about until now. The first thing he did after assuming his position in 2005 was to sell off unnecessary companies, close down companies that could not be sold, and reorganize the companies that still had hope for survival. He already had experience running a company in the United States, and to him the way Tongil Group had been managed seemed haphazard. He reduced the number of affiliated companies from the 32 at the beginning of his tenure to 15. He changed most of the executives of the affiliated companies to professionals, and increased the number of accountants from one to 20 in order to raise the transparency of the internal management of funds and of accounting. As a result, all but one affiliated company ?The Segye Times Co. ?turned from loss to profit. Due to the intense reorganization effort, last year Tongil Group recorded an operating profit of 40.4 billion won on sales of 780.6 billion won, and its debt to equity ratio was reduced to 184 percent. The Group had been totally transformed in four years. Even for a son of Rev. Sun Myung Moon, who possesses absolute charisma, such a process must have entailed considerable difficulty. People become desperate when they see their company disappearing, and their livelihoods taken away from them. CEO Moon was well aware this. "No one likes to lose their job. There were many complaints from executives when their positions were changed," he said. "However, after I arrived and carried out thorough audits of the books, it was inevitable that problems would be discovered. I did everything according to principles. "During the process, there were considerable differences in opinions and it was difficult," he said. "Horeover, I could not act on my own authority to dismiss people who had worked with my father. Ultimately, what I could do was to provide factual reports to my father. "Fortunately, although my father is not a businessman, he possesses good judgment," he said. "When everything is revealed with transparency, it becomes clear who is right." Presiding over meetings while eating hamburgers for dinner. During that process, there were numerous conflicts with the established forces within the group. When I asked CEO Moon, "I guess you are not very popular within the Group?" he answered "No" without a moment of hesitation. Then he added, "But that can't be helped. Not when the group's survival was on the line. I am a man of responsibility." Usually in such a situation, the person leading the reform effort can fail for a number of reasons: large-scale employment of cronies, giving out favors, and lining his own pockets. Fortunately, CEO Moon did not have many such opportunities. "I've lived in the U.S. for 35 years, so I know very few people in Korea. I usually eat dinner at the office and work until late, and then go straight home. I spend my weekends with my family, and go to church on Sunday. The truth is I would be most comfortable if I could give up my position as CEO of Tongil Group go back to the States." Even on the day this reporter interviewed him, CEO Moon substituted a hamburger for dinner and held an evening meeting. His secretary's desk was covered with seven plastic plates filled with hamburgers, French fries and napkins from Popeye's Next to these was a row of empty cans of Coca-Cola. "Our CEO often makes a dinner of hamburgers and holds meetings," the director of public relations for the group who sat in on the interview said. It was a scene that clearly evidenced his having lived for 35 years in the United States. He added that they usually finished their work around 11 pm. Wouldnn't he feel stifled? "Of course I feel stifled. In Korea, all I do is work. But it's all right, because I came to Korea to work, not to enjoy myself." Why is he so immersed in his work? "I take it that when my father entrusted Tongil Group to me, he wanted me to systematize it. I think he was preparing for the future. Until now, he has led the Church and the businesses solely with his charisma, but only when a system is in place can any ensuing chaos be prevented when he is no longer there. Whether it is a religion or a company, when the founder dies it cannot but go through a chaotic time if it is not systemized." CEO Moon referred to "after his father" before being prompted by the reporter. It showed that Tongil Group has already been preparing for the time after the death of Rev. Moon, which I had expected would be a taboo subject within the Church. CEO Moon also presented a singular opinion about his father. The businesses run by the Unification Church worldwide are of an unfathomably large scale, and massive conglomerates are in operation in Japan and the US. However, in regard to his father, who has shown an extraordinary ability for business, he explained, "my father is not a businessman but a religious leader." "Looking at it from close quarters, I believe he did business not to make money but to do something for the public good, and made money while in the process of doing so. If he was indeed a businessman, he wouldn't have let such non-professionals run Tongil Group, would he?" There are many concerns in the Christian nation of USA The view of Sun Myung Moon among people outside the church may be different from the view of those close to him. And outsiders may view the son of Sun Myung Moon differently from how he views himself. When I was young, I had many complexes and concerns," CEO Moon said. "In particular, the United States is a basically Christian nation. From the Christian viewpoint, my father is a perfect heretic. That being the case, would people have looked upon me with ordinary eyes?" Be it true or not, living as the son of a religious leader in the heart of controversy is not easy. All kinds of criticisms and misunderstandings as well as overly expressed praises that were showered upon him in relation to his father were also things that a teenage boy could hardly endure. "Stepping over those conflicts, I focused on my studies in high school, and entered Harvard University as an economics major." Whether it was the result of his focusing on his studies as he said, or due to his inherent intelligence or any other reason, in a very short time CEO Moon ended his wanderings and reached his goal. And the same can also be said of Tongil Group at present. Over the next two to three years, CEO Moon plans to consolidate the Group and focus on firmly establishing his system of management. He says with a laugh, "Before I was entrusted with the Group, I made large donations to the Church. At that time, I really felt bad when I heard Tongil Group was not managed efficiently." In which direction would he expand to after that? He says it will be "the businesses with high return on investment. "The resort business may create synergy with religion, but it worries me because it has a low profit ratio. I think the best business that can create a certain level of profit ratio and at the same time conform to our purpose of mission work will be the consumer goods business. "We could develop one of our own companies or acquire a company from outside. We have enough funds, so all we need to do is make the right choice from among the companies, following business principles of course." Tongil Group is? Tongil Group, established in 1963, continued to expand its business with such companies like Tongil Heavy Industries and Ilhwa. In 1998, during the Asian financial crisis, it faced possible bankruptcy, with five of its major companies placed in court receivership. However, based on donations from overseas believers, the Group was finally able to repay debts amounting to hundreds of billions of won and set out to reestablish itself. Still, most of the companies could not escape from their chronic structural state of deficit. In 2004 the Group recorded sales of 623.4 billion won and an operating loss of 40.9 billion won with a debt to equity ratio of 767%. After CEO Moon took over in 2005, the number of affiliated companies was cut from 32 to 15, and those companies that had survived went through complete restructuring, thereby cutting deficits. As a result, last year the financial situation of Tongil Group was much improved, recording 780.6 billion won in sales with an operating profit of 40.4 billion won and debt to equity ratio of 184%. At present, the affiliated companies under Tongil Group include Yongpyong Resort, Ilhwa, Segye Ilbo, Ilshin Stone, Sunwon Construction, Saeil Tour, Ilsang Ocean Resort, Tongil Sports, Seilo, TIC, JC, Pyongnong, Asia Forum, and Pyongil Media. |
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