Internal payments down at chaebol

Home > Business > Economy

print dictionary print

Internal payments down at chaebol


Internal transactions among affiliates of family-owned conglomerates (chaebol) dropped for the second consecutive year last year, the nation’s antitrust agency said yesterday.

According to the Fair Trade Commission’s (FTC) April investigation into the top 47 conglomerates, the total volume of transactions within the groups decreased by 3.8 trillion won ($3.71 billion) to 181.5 trillion won last year. Between them, the 47 groups have 1,351 subsidiaries. They are banned from holding stakes in one another because they are categorized as “large companies that might hinder fair trade practices in the market” by the FTC.

The number of conglomerates changes annually based on the FTC’s inspection of their sales, assets and number of affiliates.

The internal transaction volume started falling in 2012 after the government tightened its monitoring of unfair practices at large businesses. Conglomerates tend to rely on inside transactions in order to increase the competitiveness of subsidiaries. Although they are not illegal, the government’s view is that it could be unfair for smaller companies, which is why it tracks the volume.

The inauguration of the Park Geun-hye government, which campaigned for economic democratization, is believed to have reduced the practice among conglomerates.

According to the FTC, although the volume of the transactions dropped, the proportion of such transactions to the total rose slightly from 12.3 percent in 2012 to 12.46 percent last year.

“The proportion showed a slight increase because the conglomerates’ sales fell by about 49 trillion won from a year earlier,” said Shin Bong-sam, a director of the FTC.

SK showed the largest amount of internal transactions compared to external, at 26 percent, followed by Posco with 21.8 percent, Hyundai Motor Group with 21.6 percent, CJ with 15.3 percent and Hansol with 15.2 percent.

The volume of SK’s internal transactions was 26.7 trillion won. Hyundai Motor’s marked 35.2 trillion won and Samsung’s stood at 26.7 trillion won.

Total internal transactions of the nation’s top 10 conglomerates - Samsung, Hyundai Motor, SK, LG, Lotte, Hyundai Heavy Industries, GS, Hanjin, Hanwha and Doosan - rose by 3.3 trillion won to 140.2 trillion won.

BY song su-hyun []

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)