Disclosure of Chaebol Cross Shareholding Structures to be Forced by Law

The Fair Trade Commission announced on Nov. 17 that any listed or non-listed subsidiary of a conglomerate in which the owner’s family has at least 20 percent of the shares has to disclose its transactions with the family and other subsidiaries down the road.

As a part of the cross shareholding disclosure that was put into effect in July this year, this is to prevent conglomerate owners’ families from taking illegal profits. According to the regulation, the representative of each conglomerate subsidiary has to disclose its cross shareholding structure in detail from late this month.

In addition, the duty of disclosure of commodity, service, capital, and asset transactions will be required from 2016 to the subsidiaries in which the owners’ families have at least 20 percent shares, respectively.