Cross Shareholding Restriction
The number of the subsidiaries of major business groups subject to the cross shareholding restriction dropped for two consecutive years due to the collapse of the STX, Tong Yang, and Woongjin Groups. At the same time, the asset and profit divide between top conglomerates and the rest is widening at the same time.
The Fair Trade Commission made public its cross shareholding restriction data for this year on April 1. According to the data, the number of conglomerates in Korea has increased by one from a year earlier to 63.
The 63 chaebol had 1,677 subsidiaries combined as of that day, 91 less than the previous year’s number. The average for each conglomerate fell from 28.5 to 26.6, too. The total number had been 1,831 in 2012.
In the meantime, the leading and following conglomerates showed a greater gap in terms of the size of the assets, sales, and current net income alike. Specifically, the top four – Samsung, Hyundai Motor, SK, and LG – accounted for 52.0 percent and 55.4 percent of the total assets and sales of the top 30, and the current net income ratio was 90.1 percent. The figures increased by 6.5 percentage points, 2.5 percentage points, and 11.9 percentage points each from four years earlier.
Besides, the top four conglomerates’ assets surged 65.1 percent during the past five years, whereas those of the others in the top 10 group recorded a growth of just 37.1 percent. The asset growth rate was limited to 17.7 percent for those ranking 11th to 30th. Likewise, the top four’s sales growth rate during the five-year period reached 53.6 percent, while that of those out of 10th place was only 20.1 percent. The other six raised their sales by 59.7 percent during the same period.