April 25, 2024

• 

[THE INVESTOR] South Korean conglomerates appear to be heading for tougher times with presidential hopefuls taking a harder stance.

The presidential hopefuls are playing to the public’s growing distrust of chaebol or conglomerates led by the founding families, and have called for tougher regulations.

Of these, Seongnam Mayor Lee Jae-myung has gone so far as to say that the founding families should be separated from their companies.

Saying “extreme measures” must be taken to “separate the chaebol families from their companies” Lee hopes to bring about major changes to the country’s corporate community.

Former opposition leader Moon Jae-in has already revealed his plans for chaebol reforms, specifically the country’s top four conglomerates -- Samsung, Hyundai Motor, SK and LG groups.

Moon, who ran against Park in 2012, hopes to toughen regulations to separate financial and non-financial industries. One result of such measures would be restrictions on Samsung Life Insurance from holding Samsung Electronics shares.

In addition, Moon has suggested measures against circular shareholding structure of affiliates, which would in turn affect chaebol families’ control over their groups.

Even the conservatives, who have traditionally been market friendly, are taking a tougher approach.

Rep. Yoo Seung-min, once a key ally of the president, is reported to be of the opinion that tighter regulations must be applied to circular shareholding structure.

By Choi He-suk (cheesuk@heraldcorp.com)