Internal trading by overseas units of South Korea's top 10 business groups has soared 20 percent over the past four years, raising suspicions that they may be engaging in banned contract awarding practices, a market tracker said Monday.
Internal transactions by the overseas subsidiaries of the 10 leading family-controlled conglomerates, known as chaebol here, came to a combined 287.6 trillion won ($257 billion) in 2015, up 47.9 trillion won from four years earlier, according to the data by Chaebul.com.
(Yonhap)
In contrast, the conglomerates' domestic subsidiaries saw their inter-affiliate transactions decrease 11.6 percent to 123 trillion won over the cited period.
During the period, the top 10 conglomerates saw their combined sales grow a mere 1.6 percent, or 15.3 trillion won. The portion of their overseas units' internal transactions to sales rose 4.6 percentage points to 30.3 percent, while the figure for domestic subsidiaries fell 1.9 percentage points to 13 percent.
The surge in internal trading by the conglomerates' overseas subsidiaries raises suspicions that the business titans illegally had other subsidiaries award lucrative contracts to offshore units to avoid related regulation here.
South Korea's antitrust regulator tightly regulates internal transactions among chaebol's domestic-based subsidiaries, which is blamed for allowing owner families easy and large profits.
Leading conglomerate Samsung Group saw internal trade by its overseas subsidiaries spike 16 percent to 147.1 trillion won over the four-year period. The figure for Hyundai Motor Group surged 30.5 percent to 47.3 trillion won, with the number for SK Group edging up 3.6 percent to 32 trillion won.
The jump in internal trading by chaebol's overseas units has forced some of their domestic subsidiaries to shed a considerable number of jobs due to decreased work. For instance, top-cap tech giant Samsung Electronics Co. had a workforce of some 96,900 as of end-2015, down slightly over 5,000 from four years earlier, according to the data. (Yonhap)