More than 12 percent of business deals among large conglomerates in South Korea were so-called intragroup transactions taking place among affiliates, government data showed Thursday.
According to data from the Fair Trade Commission, intragroup transactions accounted for 12.46 percent of business deals carried out by 47 major conglomerates. The deals were worth some 181.5 trillion won ($177.5 billion).
The ratio was up 0.16 percentage point from a year earlier, while the value of the deals declined by 3.8 trillion won, the data showed.
Conglomerates have been criticized for using interaffiliate business deals to award lucrative contracts with favorable terms to each other, blocking out other companies from competition.
The data comes after the commission announced on Wednesday that it had revised its regulations, allowing it to refer conglomerates with total assets exceeding 5 trillion won to the prosecution should they be discovered to have offered undue favors to affiliates of which major stakeholders are members of the founding family or ownership family.
For SK Group, intragroup deals accounted for 26.01 percent of the total, the largest among the 47 conglomerates examined.
POSCO was next with 21.84 percent, followed by Hyundai Motor Group with 21.64 percent.
In terms of the value of the deals, SK Group also came first with 40.5 trillion won. Hyundai Motor, Samsung and LG followed with 35.2 trillion won, 26.7 trillion won and 16.4 trillion won, respectively, the data showed.
The commission on Wednesday announced that it will seek prosecution of conglomerates with total assets exceeding 5 trillion won should they offer more than 3 billion won-worth of undue favors to firms in which the founding or chairman’s family owns more than 60 percent.
By Bae Ji-sook and news reports