Stricter Restrictions to Be Imposed on Large Investment Funds

The Financial Supervisory Commission(FSC) on May 3 decided to restrict illegal financial assistance running between similar sister groups, especially from an affiliated investment trust company.
According to the FSC, it will monitor and restrain illegal transferring of large funds between related groups more precisely from this point on.
The move came about because large-scale investment fund and securities companies, controlled by the nation's top chaebol groups, recently are supplying money to affiliate groups in order to increase their capital. In some cases they are buying out a subsidiary's bond offering to a greater degree than regulations allow.
As a result, the government is considering reducing the 10-percent limit on buying sister company's securities to the 5-percent level.
In addition to that, in order to prevent investment funds from infiltrating another company's management rights by buying large portions of a certain stock, the FSC will also restrict to around the 5-percent range the purchasing of the same company's shares and bonds at the same time.
Both stock and mutual fund holdings might be also regularly examined by external auditors, it proposed.
Hwashik Bong : trojans@joongang.co.kr