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지나쌤

2 in 3 chaebol family members hold shares in unlisted affiliates

By Yonhap

Published : May 13, 2018 - 15:10

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Two out of 3 family members belonging to conglomerates own more than a 20 percent stake in one of its unlisted affiliates, data showed Sunday, a sign of potential unfair trading within businesses.

According to the data by the Fair Trade Commission, the nation's antitrust watchdog, 38 out of the country's 57 major family-controlled conglomerates, or chaebol, with assets of 5 trillion won ($4.7 billion) or more were found to have people with "special ties" to the top manager and owned stakes in affiliated companies in 2017. 


Kim Sang-jo, chairman of the Fair Trade Commission (Yonhap) Kim Sang-jo, chairman of the Fair Trade Commission (Yonhap)


Currently, South Korea bans inter-affiliate trading within a business group whose owner and family hold more than 30 percent of the shares in an affiliate. For unlisted subsidiaries, the limit is 20 percent.

Such trading has been blamed for being a means of handing over managerial control and wealth, and allowing family members of owners to easily make profits by having subsidiaries award lucrative deals to one another. Such moves undermine the principle of fair competition.

Recently, there have been moves to toughen related rules and revise the law to lower the ceiling for stock ownership.

The dependence on inter-subsidiary trading was the highest in owners and family members of Hyosung Group, followed by GS Group and Booyoung Group, according to the latest data. (Yonhap)

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