SEOUL– South Korea’s antitrust watchdog said Wednesday it plans to relax rules on large business groups under its tight supervision in line with the government’s drive to ease corporate regulations.
Under a revised enforcement ordinance to the Fair Trade Act, the government plans to reduce the scope of “relatives” whose information chiefs of conglomerates are required to report to the watchdog, according to the Fair Trade Commission (FTC).
Every year, large business groups with assets of 5 trillion won (US$3.8 billion) or more are required to publicly file details on inter-affiliate transactions, their ownership structure and key information on non-affiliates.
To this end, heads of large business groups should report to the FTC shareholding status or other details of specially related people, including their spouses and relatives.
But chiefs of large business groups have said as the range of relatives designated under the FTC’s regulations is too wide, it is burdensome to collect and report their information.
The regulator said if the new rule is implemented, the number of conglomerate chiefs’ relatives will likely drop by half, while the number of affiliates of large business groups under its supervision will almost remain intact.
The FTC also plans to allow small and venture companies invested in by conglomerates to become their affiliates after a grace period of seven to 10 years.
The move is aimed at spurring investment in small and venture companies. If placed under conglomerates’ wing, they are required to be governed by stricter regulations and forgo tax benefits and other financial support.
President Yoon Suk-yeol has vowed to ease regulations on the corporate sector in a bid to encourage companies to expand investment and create more jobs.
Source: Yonhap News Agency