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Inter-affiliate trades of chaebol edge down in 2015

All News 15:57 September 08, 2016

SEOUL, Sept. 8 (Yonhap) -- The inter-affiliate trading of South Korea's top 10 family-controlled conglomerates slightly dropped last year due to restructuring, data showed Thursday.

The combined inter-affiliate transactions of the top conglomerates came to 121.7 trillion won (US$111 billion) in 2015, down from 142.5 trillion won in 2014, according to the data compiled by the Fair Trade Commission.

Inter-affiliate transactions accounted for 12.8 percent of chaebol's total revenues last year, also down from 14.1 percent in 2014, the data showed.

The conglomerates have long been criticized for awarding lucrative business deals to their affiliates, which critics claim distorted fair market competition and stripped smaller companies of business opportunities.

Intragroup deals are also cited as a secret measure adopted by owners of conglomerates to transfer their wealth to their family members without paying taxes. South Korea has sought to rein in the economic dominance of family-controlled conglomerates for years.

By group, SK Group topped the list of inter-affiliate trading with 33.3 trillion won in 2015, down from 47.8 trillion won a year earlier. Its inter-affiliate trading accounted for 24.2 percent of its total revenue last year, down from 28.9 percent a year earlier.

SK Group is South Korea's third-largest conglomerate whose businesses range from mobile communications to oil refining.

Hyundai Motor Group, the world's fifth-largest carmaker, also slashed its inter-affiliate deals to 30.9 trillion won last year from 31.1 trillion won a year earlier. Hyundai Motor Group's inter-affiliate trading accounted for 18 percent of its total revenue in 2015, down from 18.8 percent from a year earlier.

Samsung, South Korea's largest chaebol, came in a distant third with 19.6 trillion won worth of inter-affiliate trading in 2015, down from 25.3 trillion won a year earlier. Its inter-affiliate trading took up 7.2 percent of its total sales last year, down from 8.4 percent in 2014.


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