April 24, 2024

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[THE INVESTOR] Korea’s corporate regulator said on Aug. 13 it will refer the chief of Hanjin Group to state prosecutors for failing to report group-affiliated companies controlled by his family and relatives.

Under the current regulations, all affiliates under a major group‘s wing should be reported to the Fair Trade Commission to regulate cross-shareholding and loan guarantees from 2014 to 2018.

The corporate watchdog usually designates an individual, or a legal entity atop of a business group’s management decision-making hierarchy and ownership structure, as the group’s defacto chief, to assess its compliance with regulatory rules here. 

In the case of Hanjin Group, Chairman Cho Yang-ho is atop the group’s management hierarchy and ownership structure.

According to the FTC, four companies are wholly or largely owned by Chairman Cho’s relatives, and they have supplied in-flight goods to Korean Air Lines, the group’s flagship.

Also, over 60 relatives were intentionally omitted from the list of his specially-affiliated shareholders subject to a string of regulations, the FTC said.

By Song Seung-hyun and newswires (ssh@heraldcorp.com)