South Korean business ties with Iran

The United States has been committed to the defense of freedom in South Korea for decades–since the end of active combat on the Korean peninsula in 1953. Today, the US has some 28,000 military personnel based in South Korea.

This is to say America "has South Korea’s back." Recently, when the South Korean warship Cheonan was sunk in a suspicious explosion suspected to have been caused by a North Korean torpedo, the US argued on behalf of South Korea in the UN Security Council and has plans for combined naval exercises in Korean waters.

America also has extensive business ties with South Korea, with South Korean companies exporting many products to the American market. Unfortunately, several of those big publicly-traded South Korean firms also have close, extensive ties to Iran.

For instance, the big South Korean conglomerate, LG International (003550:KS, LGCIF:US), has been actively involved for years in providing corporate life support to the Ayatollahs. LG’s activities in Iran came to light recently when President Obama announced that he would attend a groundbreaking ceremony for a LG Chemical plant in Michigan.

According to their Iranian web site, LG has offices in Tehran and sells all sorts of electronic components in and to Iran.

South Korean business ties to Iran don’t stop with LG. The following South Korean companies also have ties to Tehran:

Daelim (000210: Korea SE).  Daelim is a South Korean construction and engineering conglomerate that has conducted major operations in Iran’s oil and gas sector, from which Iran derives almost all of its revenue to fund its extensive nefarious activities. For example, Daelim upgraded the Esfahan refinery in Iran for the National Iranian Oil Engineering & Construction Company. This is particularly significant since Iran is very much dependent upon imported refined products due to limited domestic refining capacity. Daelim also completed projects in Iran’s huge South Pars natural gas field.

Daewoo (047050:Korea SE). Daewoo is a major South Korean industrial, manufacturing and engineering conglomerate with offices in Tehran and major projects in Iran, including with Iran’s energy sector. Daewoo’s Iranian activities include everything from  oilfield activities to a bus manufacturing plant project.

GS Engineering & Construction (006360: Korea SE). GS Engineering & Construction has offices in Tehran and has undertaken major construction projects worth billions of dollars in Iran’s South Pars  oil and gas field.

Hanjin Shipping (000700: Korea SE). Hanjin Shipping is a major  South Korean maritime cargo handling firm. According to United Against Nuclear Iran’s Business Registry, Hanjin Shipping has two offices in Iran, as the company itself acknowledges on its web site.

Hyundai Merchant Marine (011200: Korea SE). Part of the Hyundai Conglomerate out of South Korea, Hyundai Merchant Marine is a major container shipping company.  According to United Against Nuclear Iran’s Business Registry, Hyundai Merchant Marine recently began shipping into and out of Iran after a ten-year absence.

Kia Motors (KIMTF:US) (000270: Korea SE). According to United Against Nuclear Iran’s Business Registry, Kia Motors has a production agreement with Iran’s number 2 automotive manufacturer, Saipa.

Samsung (005930: Korea SE). Samsung is a major South Korean electronics corporation with extensive operations in Iran.

SK Networks Company Ltd (001740: Korea SE). SK is another South Korean conglomerate with operations in sectors ranging from petrochemicals and utilities to telecommunications and construction. SK acknowledges being a major supplier of steel  and chemical products to Iran. Each of these South Korean companies either directly or indirectly  help the ruling regime in Iran generate significant revenue. These firms’ willingness to partner with Iran diminishes the stigma associated with the regimes sponsorship of Jihadist terrorism and nuclear proliferation.

While these South Korean corporations provide corporate life support to the Iranian regime, Iran continues to aid the Taliban who are waging war against US GIs in Afghanistan, just as the Iranians supported the insurgents in Iraq. All the while, other Americans support and defend South Korea.

If you think there is something wrong with this, you are not alone.  The good news is that you are not powerless in this situation.

Check your own investment portfolio. Do you own stock in any of these South Korean companies? Do any of the funds you are invested in own stock in these companies?

If you do, write your financial adviser and express your desire to avoid investments in such companies and you can then replace those holdings with "terror-free" holdings readily.

There are two important online resources for investors who want to take these steps.

• United Against Nuclear Iran has an excellent online listing of companies doing business in Iran.
• There is a free online guide to terror-free investing available at Terror Free Investing.

Note: Neither the Center for Security Policy, nor the author, has any interest or position in the shares or entities detailed in this article.