Cross-shareholding arrangements among affiliates of South Korean chaebol business groups are becoming a thing of the past under the government's strong corporate reform drive.
The South Korean government held its third meeting on chaebol reform and fair economy on July 9. The first and second meetings were held in November last year and January this year, respectively. The third meeting was attended by the Korea Fair Trade Commission and the Ministries of Economy and Finance, Trade, Industry and Energy, Environment, Land, Infrastructure and Transport, Oceans and Fisheries, and SMEs and Startups.
At present, the South Korean government is moving ahead with fair economy policies for a fair market order, corporate governance reform, cooperation for joint prosperity, and consumer rights enhancement.
At the meeting, the government said that it accomplished 33 out of 64 related tasks and the remaining 31 are divided into 24 legislative, four non-legislative, and three ongoing tasks. “When it comes to chaebol reform, we established a foundation for predictable and sustainable corporate governance reform by means of the financial group supervision standard test-run in July 2018 and the stewardship code introduced in the same month,” it explained.
It also said that enterprises shared its efforts by eliminating a lot of cross-shareholding arrangements. Specifically, the number of such structures has dropped from 282 to 12 since 2017 in the group of enterprises subject to public disclosures and from 93 to five in the group of those subject to cross-shareholding restrictions.