Chaebol not reporting internal trades
Korea’s top four conglomerates failed to report or delayed reporting 29 internal trades among their affiliates over the past three years, according to the Fair Trade Commission (FTC) yesterday.
The investigation of Samsung, Hyundai Motor, SK and LG was triggered by a change in regulations last April. Conglomerates now have to report any internal trade worth more than 5 billion won ($4.6 million), or 5 percent of their total assets. Previously, they were required to report internal trades over 10 billion won, or 10 percent of their total assets.
“We looked into the top conglomerates first as [the probe] will have a ripple effect on other companies keeping up with the changed regulation,” said Seong Gyeong-je, director of the commission’s communications team.
Out of the total 29 cases, Samsung had the most internal trades that were not reported on time.
Companies are obligated to report their internal trades before the transactions are completed.
Listed companies have to report the transactions within one day, while nonlisted companies have seven days.
Samsung had 13 cases out of 904 internal trades that were never reported or were late. Hyundai Motor had eight out of 617 trades, SK had six out of 591, and LG had two out of 117.
The FTC reviewed records of internal trades from 2009 to last year.
“Although it is the first check of the companies after the regulation changed, it seems that businesses are keeping up with it,” said the commission in a release.
Fines of 670 million won were imposed. Samsung was slapped with the largest fine of 464.6 million won, followed by 164.8 million won for SK Group, 60.2 million won for Hyundai Motor and 41.6 million won for LG Group.
“We expect those four companies will pay more attention in reporting their internal trades which means that more accurate information essential to shareholders or other related organizations will be provided,” said the commission.
“We will continue investigating other conglomerates one by one.”
By Lee Sun-min [firstname.lastname@example.org]
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