Relatives to Korean tycoons lessened for antitrust scrutiny, foreigner exempted as chief

2022.08.10 15:44:13 | 2022.08.10 15:49:27

[Photo by MK DB]이미지 확대

[Photo by MK DB]

Special relations to the owner of a South Korean conglomerate subject to disclosures in changes to stakes and internal transactions would be lessened under the revised antitrust regulation of South Korea that left out the proposal of placing foreign national under the same liability of a major corporate chief in Korea due to protest from the U.S.

The Fair Trade Commission announced on Wednesday that relatives within fourth cousins by blood and relatives within third cousins by marriage would be regarded as special relations to the owner family, subject to submitting and disclosing various information to the antitrust watchdog.

The previous rule included relatives within sixth cousins by blood and relatives within fourth cousins by marriage as relatives of the business chiefs.

The decision comes as heads of conglomerates complained that it was too cumbersome to gather and report data for that many relatives. If they fail to submit the necessary documents, they may receive sanctions.

Relatives of greater distance need to still regularly report to authorities if they own 1 percent or more in equity stake of a company under the owner or are under payment guarantee obligation.

The change can cut relatives of owner falling under scrutiny by nearly half from 8,938 as of May last year to 4,515.

The change won’t affect the count of affiliates.

The revision of the Fair Trade Act would also make it easier for small and medium-sized companies and startups that have received investment from large corporations to defer becoming affiliates for seven to 10 years.

The FTC also decided to count common-law partners as relatives, now requiring them to report to the FTC. The common-law partner is only considered to be a relative if there is a child between the partner and the head of the conglomerate.

The FTC has dropped its earlier plan to identify foreign nationals as corporation chiefs upon request from various government offices concerned about the risk of stoking conflict with U.S. government.

The U.S. government has complained over the move that could be overlapped with its regulations on U.S. citizens.

The change would have specifically affected Korean-American chief Kim Bom-suk of Coupang, which trades on the U.S. stock exchange and is subject to regulation of the U.S. Securities and Exchange Commission, although the e-commerce giant operates mostly in Korea.

By Susan Lee

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