Unwavering and consistent policies are necessary to help the country's conglomerates further improve their ownership structure and overhaul unfair business practices, a senior government official has said.
"There are still many things to be done to improve their ownership structure, although we have already created lots of systems," Shin Bong-sam, the chief of the business group bureau at the Fair Trade Commission, said in an interview with Yonhap News Agency last week.
(Yonhap)
"Their practices have not been removed ... and the point is that they should voluntarily take actions (to improve their ownership structure)," he said.
The bureau was newly created last year to probe into conglomerates' illegal intra-trading deals, founding family members' unfair business practices as Kim Sang-jo, a renowned civic activist for his minority shareholder movement and dubbed "a sniper" of chaebol, was tapped to lead the corporate watchdog, in a show that the incumbent government is serious about changing big businesses here.
Kim has said earlier that Samsung Group has taken a set of measures to improve its governance structure and transparency, and is expected to take further steps down the road.
In March, a slew of large conglomerates, including Hyundai Motor Group, have unveiled plans to streamline their circular cross-shareholding structures through business spinoffs and mergers among affiliates, in the face of growing pressure from the antitrust agency to streamline their complicated ownership structure.
So far, the bureau has dealt with 19 cases imposing a total of 39.6 billion won ($36 million) in fines for unfair business deals and the violations of antitrust activities by conglomerates.
It also has referred a total of 13 business tycoons to state prosecutors for further investigations.
Shin said his bureau is working on eight cases of illegal inter-affiliate deals by Samsung, SK and other conglomerates.
"Their illegal intra-trading deals are becoming more complicated ... and we need to have more expertise to crack down on such deals," the official said.
South Korean fair trade law forbids inside deals aimed at giving unfair support to affiliates under the wing of a conglomerate. Family-run business groups have used such intra-company deals to help companies run by owner family members win lucrative contracts and earn huge sums of money.
Such trading is blamed for allowing owner families to easily net large profits by having subsidiaries award lucrative contracts to each other, undermining the principle of fair competition. (Yonhap)
