Control of financial firms to come under scrutiny

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Control of financial firms to come under scrutiny

Korea’s financial regulators announced yesterday that they are moving to introduce new laws to strengthen oversight concerning major shareholders of financial companies.

Sectors with comparatively lax rules controlling the eligibility of shareholders, such as insurers or consumer finance companies, will be subjected to periodical reviews on whether major shareholders are toeing the legal line.

Moreover, the oversight authority of companies’ boards of directors and auditors will be strengthened, including the power to appoint publicly unregistered officers that are practically in charge of on-the-ground operations, according to the plan.

In a press release yesterday, the Financial Services Commission said it has drafted a new law concerning “the corporate ownership structure of financial companies.” It will submit this to the National Assembly “as soon as possible,” it said.

All six categories of financial companies, including banking, financial investment, insurance, savings banks, consumer finance and credit card companies, as well as financial holding companies, will be required to adhere to a standard set of criteria concerning whether their major shareholders are eligible to own controlling stakes in the companies.

By Lee Jung-yoon []

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