South Korea’s leading game developer Netmarble Corp. has become the latest from the ICT category to join the conglomerate rank subject to stricter antitrust scrutiny from authorities.
South Korea’s Fair Trade Commission (FTC) announced Tuesday new entries to the big-conglomerate category - Netmarble, Meritz Financial Services Co. and Eugene Group.
Kyobo Life Insurance Co. and Kolon Group would come under stricter scrutiny in inter-affiliate investments and loan guarantees as each company’s assets now exceed 10 trillion won ($9.28 billion).
Under the Korean fair trade law, companies with assets of over 5 trillion won are subject to strict regulatory filings and are required to disclose major management issues regarding non-listed entities and large internal transactions. Larger conglomerates with assets exceeding 10 trillion won face tougher restrictions involving cross-shareholding, loan guarantees and exercise of voting rights in financial or insurance units.
In the latest watch list, the FTC named 32 companies with assets of more than 10 trillion won and 60 companies with assets of more than 5 trillion won.
Three companies - Netmarble, Meritz Financial Services and Eugene Group - have become new members of the 5-trillion-won group. Netmarble’s assets ballooned to 5.7 trillion won after it went public last year, raising 2.7 trillion won in fresh capital. With the joining of Netmarble, a total of four ICT companies are now in the 5-trillion-won conglomerate club facing tougher scrutiny. Its ICT peers already designated as large conglomerates are the country’s leading chat-app operator Kakao, portal giant Naver and another game developer Nexon Co.
Meritz Financial Services joined the group after it saw its assets increase to 6.9 trillion won following new issues from affiliates Meritz Securities Co. and Meritz Capital Co. Eugene Group also saw its assets swell on improved earnings and the acquisition of Hyundai Savings Bank.
While Kyobo Life Insurance and Kolon Group were newly added to the 10-trillion-won group, Daewoo Engineering & Construction Co. was removed from the list after its assets fell to 9.7 trillion won upon paying off its 1.4 trillion won debt.
The number of affiliates of large conglomerates with assets of more than 5 trillion won has been steadily climbing, from 1,579 in 2014 to 2,083 this year, according to the FTC.
By Seok Min-soo and Kim Hyo-jin
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