Those of us who watch and study Korean big business and their complex corporate structures, find the relationship between the Groups and Korean government facinating. On one hand the government tries to regulate Korean bid business, one the other hand hampering the Groups might hurt the economy.
One issue that continues to surface is the holding company issue. All of the major Korean business groups have a defacto holding company. Most often the defacto firm is wholely owned by the controlling family and used to transfer control from one generation to the next.
This article notes a move by Korea's regulatory agency to push the Groups to better transparancy and less complex and clouded shareholder systems...
Fair Trade Commission (FTC) chairman Kang Chul-kyu Friday hinted that the anti-trust regulator will seek ways to give conglomerates incentives if they improve their long-standing conservative governing structures.
In a closed-door meeting with chiefs of 15 conglomerate' restructuring offices in downtown Seoul, Kang said the FTC intends to offer conglomerates incentives to convert their complicated shareholding system into a holding firm system.
Kang told reporters that his comment on the incentives has come after representatives from conglomerates called on him to scrap regulatory requirements dealing with their control of subsidiaries.
He said the participants requested a step-by-step lowering of the ceiling on holding firms' owning of units, 30 percent or more for non-listed units and 50 percent for listed units.
Furthermore, Kang said, they hoped that the FTC would eventually abolish the requirements.
The chairman replied that it is difficult for the regulator to accept the proposal, but said an incentive system could be possible for those trying to conform to the government's policies.
Kang also called for conglomerates to have transparent operations in their restructuring offices.
Kang said he told the participants to take responsibility for trading and controlling affiliates. Compared to the rights they have, restructuring offices lack transparency and responsibility, he said.
The corporate restructuring offices of chaebol, such as Samsung Group and LG Group, have frequently been investigated by prosecutors for their questionable funding of affiliates since the 1997 financial crisis.