The intra-group deals of South Korea’s top 10 conglomerates reached an all-time high last year amid growing calls for reining in the economic power of family-controlled conglomerates, data showed on Tuesday.
The combined inter-affiliate transactions of the top conglomerates came to 154 trillion won ($150 billion) in 2013, up 1.92 percent, or 2.9 trillion won, from 2012, according to the data compiled by Chaebul.com, which tracks the country’s conglomerates.
The 2013 figure marks the highest-ever, with the comparable figures being 151.29 trillion won in 2012, 152.56 trillion won in 2011 and 117.97 trillion won in 2010.
Inter-affiliate transactions accounted for 14.36 percent of chaebol’s total revenues last year, also up from 14.08 percent in 2012, the data showed.
The conglomerates, known as chaebol in Korea, 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.
Intra-group deals are also cited as a secret measure adopted by owners of conglomerates to transfer their wealth to their family members without paying taxes.
The Park Geun-hye government has been pushing to adopt diverse regulations and laws aimed at punishing large conglomerates involved in unfair business activities including those preying on small companies.
By group, Samsung, South Korea’s largest chaebol, slashed its inter-affiliate trading by 5 percent to 26.74 trillion won last year, though its revenue increased, with the portion of inter-affiliate transactions declining by 1.73 percent to 34.4 trillion won.
Hyundai Motor Group also cut its inter-affiliate deals to 34.4 trillion won last year from 35 trillion won a year earlier.
In April of last year, the world’s fifth-largest carmaker vowed to drastically cut its inter-affiliate trading, a move Hyundai said would offer new business opportunities worth 600 billion won per year to small and medium companies.
Energy and telecom giant SK Group saw its inter-affiliate trading surge 15 percent last year to reach 40.52 trillion won, and LG Group’s inter-affiliate transactions gained 7.5 percent last year to reach 16.45 trillion won, the data showed. (Yonhap)