Status of Ownership and Investment by Holding Companies
It has been found that there have been 32 cases where holding companies made indirect investments in domestic affiliates through overseas affiliates. This is seen as a tactic to circumvent regulations on holding companies, undermining the very purpose of the holding company system, which was introduced to enhance transparency in corporate governance.
According to the "2025 Status of Ownership and Investment by Holding Companies and Analysis of Profit Structure" released by the Fair Trade Commission on December 23, as of the end of September this year, among 92 large business groups, 45 have transitioned to a holding company structure with a controlling shareholder. This number has been steadily increasing over the past 10 years, rising more than fivefold from 8 in 2016. The Fair Trade Commission assessed that "the holding company system has established itself as a representative form of corporate organization."
The average ownership stake in general holding companies within the converted groups was 24.8% for controlling shareholders and 47.4% for their families. This is similar to last year’s figures of 24.7% and 47.7%, respectively.
The Fair Trade Commission stated, "While the ownership stake of controlling shareholders in holding companies within converted groups has generally declined over the past 10 years, there has been little change in the stake held by their families."
Among the large business groups analyzed, 384 companies were found to be controlled by controlling shareholders and their families from outside the system. Of these, 232 companies (60%) were subject to regulations on private interest appropriation.
Among the 232 companies, 26 held shares in holding companies. This means that controlling shareholders and their families indirectly invested in holding companies through companies subject to private interest appropriation regulations outside the system. The average ownership stake in the holding companies held by these entities was 9.97%.
There were 32 cases of indirect investment by holding companies in domestic affiliates through overseas affiliates. By using overseas affiliates as intermediaries for indirect investment in domestic affiliates, they circumvented the restriction on holding shares in affiliates other than subsidiaries and sub-subsidiaries.
Despite the characteristic of holding companies, which should primarily derive income from dividends by controlling other affiliates, there were 30 companies where non-dividend income accounted for less than 30% of total income. Among them, 15 companies, including SK, earned non-dividend income from trademark royalties, real estate rental fees, and management and consulting services.
The largest category of non-dividend income transactions among affiliates was trademark royalties, totaling 1.404 trillion won, which accounted for 13.0% of total sales.
The Fair Trade Commission stated, "There is a continued need for social oversight to ensure that intangible assets (brands), whose value may be difficult to accurately assess, are not being used as an unfair means to easily transfer profits from affiliates to holding companies where controlling shareholders and their families have high ownership stakes."
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