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170 Subsidiaries Still Directly Controlled by Conglomerate Owner Families
Outside the Holding Company System
170 Subsidiaries Still Directly Controlled by Conglomerate Owner Families
  • By Yoon Young-sil
  • November 12, 2019, 12:42
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Owner families of the 23 business groups that have adopted a holding company system still directly manage 170 companies not controlled by the holding company.

The Fair Trade Commission (FTC) of South Korea announced on Nov. 11 that a total of 23 large business groups were under a group-wide holding company system as of September this year, up from 22 a year ago.

The FTC defined the group-wide holding company system as the total assets of the holding company and those under the holding company in a large business group being at least 50 percent of the total assets of the companies in that group.

According to the FTC, the 23 groups had 962 subsidiaries as of the end of September, including 760 found in the holding company system. The ratio, 79 percent, edged down from last year’s 80.6 percent.

The 23 groups include 21 owner-led groups and the owners and their families controlled a total of 170 subsidiaries outside the holding company system. The 170 companies include 81 subject to regulations on private profit taking in accordance with the Fair Trade Act.

The number increases to 109 when 28 subsidiaries are added that the FTC regards as being in the monitoring blind spot, that is, listed subsidiaries in which the owners’ and their families’ shareholding is from 20 percent to 30 percent. The number of such companies is largest in GS, followed by LS and Hyosung.