SEOUL, Nov. 18 (Korea Bizwire) – From now on, all transaction details related to cross-shareholding among business group affiliates must be disclosed to the public. The Fair Trade Commission said on November 17 that a scheme to prevent owner families from taking unfair profits from the cross-shareholding practice will be implemented from the same day.
Earlier on July 25, the fair trading regulator had announced a pre-notification that it would begin implementing the scheme to keep a few owner families of conglomerates from taking profits through the market mechanism.
Cross-shareholding details of the business group as of the first day of April must be disclosed once a year on May 31. Any change in such details must be reported four times a year at the end of every quarter (February 28, May 31, August 31, and November 30). In addition, any business group whose owner has more than 30 percent of the shares (20% for privately held companies) must reveal their transaction details on goods, services, capital, and assets.
A Fair Trade Commission official said, “With the new scheme, we wanted to relieve the problem of cross-shareholding among business groups by way of the self-correcting market mechanism. We hope it could prevent owner families from taking undue profit from buying and selling of their shares based on inside information.”
By M.H. Lee (firstname.lastname@example.org)