Korean holding companies see net increase from last yearThe number of holding companies in Korea saw a slight net increase last year from a year earlier amid the government's efforts to encourage firms to have a more transparent governance structure, the corporate watchdog said Tuesday.
The Fair Trade Commission (FTC) said a total of 168 holding companies were registered with the regulator as of end-December last year, up from 164 the previous year.
Sixteen holding firms were newly created last year, but 12 companies were removed from the corporate watch list due largely to devaluations in assets, according to the FTC.
In Korea, holding companies with assets of more than 500 billion won ($389 million) are placed under the corporate watchdog's supervision.
The number of holding companies created by larger business groups reached 48 at the end of last year, up from 46 a year earlier.
The average assets of the total holding companies came to 2.38 trillion won as of end-December, up 10.1 percent from the previous year.
The number of holding firms with assets of 1 trillion won or more reached 59, accounting for 35.4 percent of the total.
The average debt-to-equity ratio reached 32.7 percent, down from 35.3 percent a year ago.
A total of 158 general holding firms held cash or cashable assets worth 65.8 trillion won as of end-December, up 19 percent from the previous year.
The government has encouraged conglomerates, called chaebol, to convert themselves into holding companies to resolve the cobweb-like family-run governance structure.
Most chaebol have adopted holding company structures, but the scheme is also being used as a tool to strengthen the grip of founding families over affiliated firms, rather than to improve the transparency of management.