The number of holding companies in South Korea declined in the fourth quarter despite the government's efforts to encourage firms to have a more transparent governance structure, the corporate watchdog said Thursday.

The Korea Fair Trade Commission said a total of 164 holding companies were registered with the antitrust regulator as of end-December last year, down from 167 three months earlier.

The registered holding companies consist of 154 general holding firms and 10 financial ones.

The fall came as three holding companies were newly registered, while six small and midsized holding businesses were eliminated from the list due largely to a fall in assets.

In South Korea, holding companies with assets of more than 500 billion won ($448 million) are placed under the corporate watchdog's supervision.

The number of holding companies created by larger business groups reached 46 at end-December, up from 43 three months earlier.

The average assets of the holding firms came to 2.16 trillion won as of end-December, up from 1.99 trillion won three months earlier.

The number of holding firms with assets of 1 trillion won or more reached 51, accounting for 31.3 percent of the total holding companies.

The debt-to-equity ratio reached an average of 35.3 percent at the end of last year, up from 33.9 percent three months prior.

The government has encouraged conglomerates, called chaebol, 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 also being used as a tool to strengthen the grip of founding families over affiliated firms, rather than to improve the transparency of management. (Yonhap)