Demands are rising for the disclosure of specific information on the largest shareholders of listed companies in the wake of the recent Lotte Group scandal.
At present, some of the half-yearly reports submitted to the Financial Supervisory Service (FSS) by the subsidiaries of major Korean business groups do not show information related to the largest shareholders such as their shareholding status, consolidated statements of financial positions, income statements, or the present conditions of business.
According to the public announcement guidelines of the FSS, details as to factors that could affect business management stability, including the overview of the corporate body, shareholding ratio pertaining to the largest shareholder, financial conditions, and business conditions should be disclosed when a corporate body is the largest shareholder. However, the guidelines are not mandatory.
Shinsegae International, Dongwon Industry, Pulmuone Foods, Hankook Tire, Hanjin Heavy Industries & Construction, KT Music, LS Industrial Systems, POSCO C&C, and the like recently omitted their financial status as to the largest stockholders. They are likely to be given a warning by the FSS, as were Lotte Group subsidiaries such as Hotel Lotte and Lotte Aluminum. The subsidiaries disclosed the overview of Lotte Holdings and L Investment Company, while omitting the shareholding and financial status of the largest shareholders.
In the meantime, subsidiaries of the Hyundai Motor Group, the Daesang Group, and so on simply showed the capital, assets, and debts of their biggest shareholders. Those of the Samsung Group, on the contrary, disclosed even income statements and consolidated statements of financial positions. Samsung Fire & Marine Insurance and HI Investment & Securities showed the business and financial status of the biggest shareholders, too.