Chaebol Barred from Controlling Financial Holding Companies
The government will allow the envisioned financial holding companies to acquire stakes in affiliate banks within the boundary of 130 percent of their equity and possess them for two years.
The Economy and Finance Ministry is seeking to take the step to help prompt the setup of the financial holding companies, making an exception to the current law preventing the holding firms from owning shares of the affiliates within a 100 percent limit of their net value.
``The ministry will implement the step through the revision of the enforcement decree of the financial holding company law,'' said a MOFE official.
The revision will also stipulate that any funds to be invested in the financial holding firms shall be publicly subscribed and should not permit any one to hold more than five percent stakes.
Financial holding firms with more than 100 billion won in assets will have to fill more than 50 percent of their board of directors with outside directors and set up audit and inspection committee, while strengthening the rights of minor share holders.
These and other measures were unveiled yesterday during the deputy- ministerial meeting led by MOFE Deputy Minister Lee Jung-jae at the government complex building in Kwachon.
Any professional investors separated from the 30 major conglomerates, or chaebol, would be prevented from establishing the financial holding firms for five years, and would be barred from engaging in financial transactions with the relevant business groups for another five years after setting up the holding firms. …