Fair Trade Commission to Disclose Stock Ownership Status of Publicly Announced Business Groups on the 3rd
It has been revealed that the families of the heads of some corporate groups, including Lotte, control key domestic affiliates through overseas subsidiaries or public interest corporations.
According to the "2023 Disclosure Target Corporate Groups (large corporate groups with assets of 5 trillion won or more) Share Ownership Status" data announced by the Fair Trade Commission on the 3rd, there are 43 overseas affiliates (belonging to 13 corporate groups) in which the family of the head holds 20% or more of the shares. Among these, 11 overseas affiliates (belonging to 5 groups including Lotte, Janggeum Shipping, Kolon, Joongang, and OK Financial Group) were found to have directly or indirectly invested in domestic affiliates.
Among the overseas affiliates where the family of the head holds 20% or more shares, 9 (belonging to 5 corporate groups) directly invested in 16 domestic affiliates. Among these, 7 domestic affiliates were found to have more than 50% ownership. Lotte has 21 overseas affiliates, including Gwangyunsa and Lotte Holdings, that directly or indirectly invest in 13 domestic affiliates such as Busan Lotte Hotel and Hotel Lotte. Five domestic affiliates including Lotte Hotel, Hotel Lotte, and Lotte Property & Development have a combined overseas affiliate share exceeding 50%.
Janggeum Shipping's chairman, Jang Tae-soon, owns 100% of a Hong Kong company that holds 82.97% of the shares of Janggeum Shipping Co., Ltd., the top domestic company. Chairman Jang directly owns 17.03% of Janggeum Shipping Co., Ltd.
The total number of groups holding overseas affiliates that directly or indirectly invest in domestic affiliates is 27 (with 108 overseas affiliates), an increase of 4 from last year. The use of non-profit corporations (including public interest corporations) for affiliate investment has also increased, with 86 non-profit corporations from 46 corporate groups holding shares in 148 affiliates (average shareholding ratio of 1.14%).
The internal shareholding ratio of disclosure target corporate groups (the ratio of shares held by the same person, relatives, affiliates, non-profit corporations, executives, etc., including treasury stock, out of the total issued shares of affiliates) rose by 1.3 percentage points from last year to 61.7%. The internal shareholding ratio of the 72 corporate groups with heads increased by 1.3 percentage points to 61.2%, surpassing 60% for the first time this year.
The number of companies subject to unfair profit appropriation regulations (companies where the family of the head holds 20% or more shares and companies whose shareholding exceeds 50%) increased by 65 to 900 companies belonging to 72 corporate groups with heads, compared to last year (66 groups, 835 companies).
The Fair Trade Commission stated, "While strengthening monitoring of unfair internal transactions and the family heads' acts of unfair profit appropriation in large corporate groups, we plan to sequentially analyze and announce key information on large corporate groups such as debt guarantees, exercise of voting rights by public interest corporations, internal transactions, governance, and holding companies by the end of the year to enhance market monitoring functions."
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