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Chiefs of 20 conglomerates not registered as board members: regulator

All News 15:36 December 09, 2020

SEOUL, Dec. 9 (Yonhap) -- The chiefs of 20 large business groups in South Korea, including top conglomerate Samsung Group, did not register themselves as board members of their affiliates, the antitrust regulator said Wednesday, a move widely seen as an attempt to avoid managerial responsibilities.

As of May, the owners of Samsung, chemicals-to-construction conglomerate Hanwha, leading shipbuilder Hyundai Heavy Industries and 17 other conglomerates were not board members of the groups' affiliates, the Korea Fair Trade Commission (KTFC) said in a report on large business groups' governance structure.

It indicates some family members of conglomerates exert influence within the groups without formally holding responsibility for management.

Of 1,905 firms affiliated with 51 owner-controlled conglomerates, only 16.4 percent or 313 units had group chiefs or their family members registered as board members.

Of 21 business groups subject to the watchdog's review for the past five straight years, the portion of affiliates with owner families as board members was 13.3 percent this year, down from 14.3 percent in 2019, according to the KTFC.

But in the case of key listed affiliates or holding companies, more conglomerate owners or their family members registered themselves as board members as they tend to hold a large stake in such firms, the KFTC said.

The government has encouraged family-run conglomerates, called chaebol, to convert themselves into holding companies to resolve cobweb-like governance structures.

But some big-name business groups have used the scheme as a tool to strengthen the grip of founding families over affiliated firms, rather than to improve the transparency of management.

Chiefs of 20 conglomerates not registered as board members: regulator - 1

sooyeon@yna.co.kr
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