2 companies added to list that can’t cross-invest

Home > Business > Economy

print dictionary print

2 companies added to list that can’t cross-invest


The Fair Trade Commission prohibited yesterday 62 companies with over 5 trillion won ($4.5 billion) in assets from allowing affiliates to buy new shares in each other in a bid to prevent excessive expansion of big businesses.

The country’s antitrust agency said this year’s list includes the country’s largest paper manufacturer, Hansol, and cosmetics maker Amore Pacific.

The agency has begun making the list every year since 2009.

Once on the list, a group cannot allow subsidiaries to make new investments in one another and they must report existing cross shareholdings. In addition, inter-subsidiary business transactions have to be reported to the authority.

For the past five years, the FTC compiled financial information on major corporations and their subsidiaries in order to improve transparency and aid the government’s making of policies that deals with businesses.

Last year, 63 companies were on the list.

The FTC said Hansol and Amore Pacific’s assets recently increased, which put them on the list. Daehan Cable, Eugene and the Korea National Oil Corporation were dropped this year because of their sales of subsidiaries.

Of the total, 51 are private sector companies, including the country’s largest conglomerates: Samsung, Hyundai Motor, SK, LG and Lotte.

The FTC also announced a list of groups owning the largest number of subsidiaries.

Daesung was on top of the list with 83 subsidiaries, followed by CJ Group with 82, SK Group with 81, GS Group with 79 and Lotte Group with 77.

The 62 companies banned from making mutual investments own a total of 1,768 affiliates, according to the agency. The number fell for the first time since 2009 when the government began keeping track.

Those companies own 28.5 subsidiaries on average, slightly down from last year.

The FTC said the companies that have been under monitoring by the government did make efforts to reduce subsidiaries by selling or merging unprofitable and peripheral units.

Posco showed the most effort as it trimmed 18 affiliates. The steelmaker integrated 12 units into bigger units and shut down nine marginal units. SK also merged 11 units into profitable units and sold six money-losing units.

The average assets of the 62 businesses stood at 34 trillion won, up 2.6 trillion won from last year.

By Song Su-hyun [ssh@joongang.co.kr]
Log in to Twitter or Facebook account to connect
with the Korea JoongAng Daily
help-image Social comment?
lock icon

To write comments, please log in to one of the accounts.

Standards Board Policy (0/250자)

What’s Popular Now