Controversy over the revival of an old law to limit conglomerates’ equity investment has resurfaced after Rep. Park Geun-hye, a major presidential hopeful from the ruling camp, hinted Thursday at toughening regulations. 

“We will seek to tighten the regulation over their growth with mergers and acquisitions through excessive equity investing,” said Park, who is serving as chairwoman of the ruling Grand National Party’s emergency council.

“Large companies may be the country’s growth engines, but monopolization must be prevented.”

The main opposition Democratic United Party is also seeking the revival of the law, abolished in 2009, in its 10 key policy goals unveiled Tuesday.

The revival of the law is expected to become one of the main campaign issues ahead of the general elections in April and presidential elections in December.

The law, introduced in 1986, was meant to prevent excessive expansion of conglomerates by barring more than 40 percent of their assets from being invested into affiliates or other companies.

The Lee Myung-bak government abolished the law as part of its business-friendly efforts to revitalize the economy, exempting the nation’s top 31 companies, including Samsung, Hyundai Motor and SK, from the regulations.

Park was one of the lawmakers that supported the end of the law at the time.

But there has been criticism that the abolishment has led some large companies to enter into businesses like restaurant chains and neighborhood markets that have long been considered preserves for smaller vendors.

In the face of rising criticism, Samsung Group, the nation’s top conglomerate, last year sold its MRO unit, which provided procurement services to its affiliates, to a local firm.

Coupled with the government’s initiative to seek shared growth between large and smaller companies, industry watchers say a major overhaul is unavoidable even though it could not mean exactly reviving the repealed law.

The Fair Trade Commission, the nation’s top antitrust watchdog which had implemented the law regulations, said Friday that it has yet to start “official” discussions on whether to push to revive the old law.

“If there’s any request from the political community, we would decide our position from the government’s side,” an FTC official said.

By Lee Ji-yoon
(jylee@heraldcorp.com)