12 corporate groups with overseas affiliates with more than 20% of the total family
835 affiliates of large corporations, three times the amount of last year
FTC, analysis result of stock ownership status of large conglomerates
It was found that some large conglomerates are supporting their dominance through overseas affiliates or public interest corporations.
According to the Fair Trade Commission on the 7th, as a result of analyzing ‘Status of Share Ownership of Business Groups (Large Business Groups) Subject to Disclosure in 2022,’ the Fair Trade Commission said, “The structure of controlling the entire corporate group by using equity investment in affiliates with a small share of the head of the family continues. There have also been cases of indirectly maintaining and reinforcing control through overseas affiliates and public interest corporations,” he said.
◇ 23 large conglomerates, direct and indirect investment in Korea through overseas affiliates… Lotte and Naver have the most
As of May 1 of this year, the number of large conglomerates with foreign affiliates that directly or indirectly invested in domestic affiliates stood at 23, up by one from last year.
89 foreign affiliates belonging to these companies directly or indirectly invested in 66 domestic affiliates.
Of these, nine overseas affiliates belonging to four groups, including Lotte, Kolon, Janggeum Merchant Marine, and OK Financial Group, were found to have more than 20% of the ownership of the family.
Twelve out of 23 groups held stakes in domestic affiliates only in the form of direct investment through 21 foreign affiliates, but the remaining 11 groups directly or indirectly owned 45 domestic affiliates, forming a total investment structure of 531.
In particular, Lotte (506) and Naver (12) had a large number of investment structures and had a longer investment stage than other groups.
Lotte and Naver had the largest number of foreign affiliates with 21 and 9, respectively, direct or indirect investment in domestic affiliates, and the largest number of invested domestic affiliates with 13 and 11, respectively.
It was also found that Kakao and KCC (6 each) and LG and Hanwha (5 each) also have a number of foreign affiliates that directly or indirectly invested in domestic affiliates.
Of the 66 large conglomerates that might be owned, 12 had foreign affiliates with more than 20% of the owner’s family, regardless of whether or not they invested in Korea.
These include SK, Hyundai Motor, Lotte, CJ, DL (Daelim), Hyosung, Booyoung, Kolon, Janggeum Merchant Marine, Hyundai Marine & Fire Insurance, Iljin, and OK Finance.
They have 38 overseas subsidiaries in the United States, Japan, Singapore, Hong Kong and the British Virgin Islands.
Of these, 21 overseas affiliates in 9 groups were owned 100% by the family of the owner.
The status of foreign affiliates in which the head family owns 20% or more of shares and foreign affiliates directly or indirectly invested in domestic affiliates has been newly disclosed since this year as the revised Fair Trade Act came into force at the end of last year.
Min Hye-young, head of corporate group policy at the Fair Trade Commission, said, “As a result of the analysis, it was determined that some groups have overseas affiliates with a fairly complex structure, and that overseas affiliates are also affecting domestic affiliates. will,” he said.
◇ The trend of increasing investment in affiliates using public interest corporations… Three-fold increase in the number of subjects subject to the regulation of exploitation of private interests
The number of affiliated investments using non-profit corporations such as public interest corporations is also on the rise.
The number of affiliated non-profit corporations stood at 90, up 12 from a year ago.
If we look at public interest corporations alone, the number increased by 10 to 79.
Ninety non-profit corporations in 47 conglomerates held stakes in 155 affiliates, with an average stake of 1.2%.
Last year, there were 139 investee affiliates.
The internal ownership ratio of all 76 large conglomerates was 60.4%, an increase of 2.3 percentage points from the previous year.
The internal ownership ratio of 66 corporate groups with a total number of companies also increased by 1.9 percentage points to 59.9%.
However, the ownership ratio of the head family rose only 0.2 percentage points to 3.7 percent, while the stake in affiliates increased by 1.6 percentage points to 53.3 percent.
The Fair Trade Commission explained, “The internal ownership ratio of the top 10 groups that can own a head office has been increasing over the past 20 years.
Companies with a low percentage of ownership by the owner family include Dunamu (0.34%), Hyundai Heavy Industries (0.48%), SK (0.50%), Kakao (0.56%), and Janggeum Merchant Marine (0.67%).
The second generation (child of the same person) held shares in 222 affiliates in 52 groups including Hankook Tire and Iljin.
The number of companies subject to the regulation of exploitation of private interests was 835 belonging to 66 groups, an increase of 570 from last year (57 groups, 265 companies).
This is 3.15 times the level of last year.
With the enforcement of the Fair Trade Act amended at the end of last year, the scope of regulation changed from a company with more than 30% of the owner’s family share (20% of unlisted company) to a company with more than 20% of the owner’s family’s stake and a subsidiary in which the company owns more than 50% of the stake. Companies in the zone were included in the target list.
The Fair Trade Commission said, “The system introduced by the revised Fair Trade Act, such as disclosure of the status of overseas affiliates, restrictions on voting rights and the imposition of disclosure obligations for public interest corporations, will be established, and the review guidelines for unfair support acts and personal exploitation will be revised to increase the predictability of internal transaction regulations. “he said.
/yunhap news