[THE INVESTOR] Korea’s Fair Trade Commission Chairman Kim Sang-jo on June 14 called on family-run chaebols to get rid of their shares in non-core and unlisted affiliates, in an effort to curb intra-group dealings.
“I request owner family members (of the conglomerates) in managerial posts to keep shares of their key affiliates and sell the rest as soon as possible,” the antitrust chief said at a press conference marking his first year in office. “The problematic inter-subsidiary dealings arise due to owner families’ stake in non-core affiliates.”
FTC Chairman Kim Sang-jo
Kim referred to non-core affiliates as, namely, businesses in system integration, real estate, logistics and advertisement, that are less relevant to key businesses of conglomerates. He said owner families, through inter-subsidiary trading, gain profits by awarding contracts to each other at the expense of small firms and traders in the industry.
He also urged relatives of owner families that are not participating in management to separate their businesses and trade independently from the conglomerates, if it is difficult for them to sell off shares.
Kim, dubbed “Chaebol Sniper” for his shareholder activism campaigns against conglomerates, warned of the possibility of further investigation and sanctions on companies that are suspected of inter-affiliate trading and other unfair practices. “We cannot force (family members) to sell shares by law, but if companies continue to carry on the practice, they will be under the FTC’s investigation.”
By Ahn Sung-mi (email@example.com)