The number of holding companies in South Korea declined this year from a year earlier due largely to a fall in mid-sized holding firms, the country's antitrust regulator said Wednesday.

The Korea Fair Trade Commission (KFTC) said a total of 167 holding companies were registered with the country's antitrust regulator as of end-September, down from 173 the previous year.

The registered holding companies consist of 157 general holding firms and 10 financial ones.

A fall in the number of small and mid-sized holding companies with assets of less than 500 billion won ($451.8 million) outweighed a rise in the number of holding firms affiliated with large business groups, according to the KTFC.

The number of smaller holding firms fell to 82 this year from 94, while that of holding companies controlled by conglomerates rose to 43 from 39.

The average assets of the holding firms came to 1.99 trillion won as of the end of September, up from 1.89 trillion won a year earlier. The number of holding firms with assets of 1 trillion won or more reached 48.

The debt-to-equity ratio reached an average of 33.9 percent this year, down from 34.2 percent a year ago.

Heads of conglomerates and their family members owned a combined stake of 49.5 percent on average in holding companies, the antitrust regulator said.

South Korea's conglomerates, called chaebol, have been under fire for years, as they largely rely on controversial cross-shareholding arrangements among their affiliated companies to strengthen their owner families' control over the entire group.

The government has encouraged such big-name business groups to convert themselves into holding companies to resolve the cobweb-like family-run governance structure.

Most conglomerates have adopted holding company structures, but the scheme is being used as a tool to strengthen the grip of founding families over affiliated firms, rather than to improve the transparency of management.

Conglomerates' holding companies are also heavily reliant on intra-group trading, and expanded their presence in so-called second-tier and third-tier subsidiaries in their multiple levels of affiliates, instead of increasing investment in their first-tier subsidiaries, the KFTC said. (Yonhap)