The continuing saga involving Hyundai Asan Tours and the North Korean government has taken a new twist with rival South Korean conglomerate Lotte offering to take over the North Korean tourism project that Hyundai Asan has been exclusively operating since the late 1990’s:

The tourism arm of the Lotte Group is ready to take over from rival conglomerate Hyundai in running tours to the North Korean border city of Kaesong if Pyongyang decides to dump its long-term business partner, company executives said over the weekend.

“We plan to actively discuss it if the North contacts us again,’’ an executive at Lotte Tours said on condition of anonymity, referring to the troubled tour project currently headed by Hyundai Asan.

The announcement comes after Lotte Tours revealed last month it received a fax from North Korea inviting it to run the Kaesong tour project.

The dispute between North Korea and Hyundai occurred after an internal audit of Hyundai Vice-Chairman Kim Yoon-kyu revealed numerous accounting irregularities:

A Hyundai Asan source said, “Last July, during Hyundai Groups internal audits, Kim was accused of 10 instances of malfeasance including receiving kickbacks from construction in Mt.Kumgang, subcontracting corruption related to two joint construction projects and putting exorbitant sums of money on company expenses.”

The ill gotten money is believed to have been embezzled to North Korea continuing a disturbing trend of embezzling South Korean money to North Korea started by former President Kim Dae-jung in order to get Kim Jong-il to agree to the joint 2000 Inter-Korean Summit in Pyongyang.   Hyundai Chairwoman Hyun Jeong-eun angered by the corruption fired Kim, and North Korea responded in kind by slashing the amount of tours available in North Korea and by even harassing Chairwoman Hyun during a business trip to North Korea to discuss the Hyundai and North Korean business relationship:

Hyundai Group chairwoman Hyun Jeong-eun on Monday publicly rejected a North Korean demand to reinstate Kim Yoon-kyu, the disgraced vice chairman of Hyundai Asan who had dealt with the North for many years in arranging their joint tourism projects. “I now seem to stand at a crossroads of whether to continue or quit our North Korea projects,” she said. Since Hyundai’s ouster of Kim, Pyongyang has applied pressure on the group by slashing the quota for the Asan’s Kumgang Mountains tours and blanking requests for negotiations on stalled projects to Kaesong and Mt. Baekdu. When Hyun visited the Kumgang Mountains, she says, authorities forced her to open her handbag, a gesture she interpreted as contempt, and she concluded, “I’ll choose honest conscience rather than opportunistic servility.”

This spat of course got the South Korean Unification Minister Chung Dong-young to try and mediate the dispute between Hyun Jeong-eun and the North Korean government.  Chung is what I like to call one of Kim Jong-il’s useful idiots and unsurprisingly called for the corrupt Kim Yoon-kyu to be reinstated:

Unification Minister Chung Dong-young met with Hyundai Group chairwoman Hyun Jeong-eun on Sunday to discuss a spat between the company and North Korea over a tourism project Hyundai Asan operates in the Kumgang Mountains.

A source connected to the matter said Wednesday the two discussed North Korean demands to reinstate Hyundai Asan vice chairman Kim Yoon-kyu, who was ousted over corruption charges, but the differences in opinion were wide. That suggests Chung asked for the disgraced executive to be reinstated.

It was the following day that Hyun posted a statement on the Hyundai Asan homepage saying that Kim had been removed due to corruption and rejected calls to reinstate the man who had for many years coordinated the tourism projects with the North.

Let’s try to understand this.  The Korean government wants to have a corrupt corporate leader reinstated to continue his corrupt business activities because the North Koreans are unhappy that he was fired and are not receiving any more illegal kickbacks. 

For those not accustomed to the South Korean government’s handling of inter-Korean affairs this may seem silly, but this is in fact the standard operating procedure of the South Korean government.  The North Koreans make demands and throw a tantrum and the South Koreans give in and give them what they want to get them to behave.  In the recent past the South Korean government has given the North Koreans food, fertilizer, oil, and other goods with little to show for it all in the name of keeping the status quo on the peninsula.  The current six way nuclear talks is the macro example of this trend where the South Korean government has gone out of it’s way to assist the North Koreans during the negotiations to the point of even alienating their military ally the United States.

The demand that Kim be reinstated is just another example of this and allowing Lotte to run the joint tourism project will allow the North Koreans an opportunity to begin another business relationship that will undoubtedly feature more corruption and embezzlement to North Korea that will keep the elites in power and the North Korean masses starving all in the name of inter-Korean cooperation.  Chairwoman Hyun is one woman who has finally drawn a line against the North Korean’s provocations, however the South Korean government is not likely to follow suit.

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