The Korea Herald

피터빈트

Conglomerates lack responsible management: FTC

By Kim Yon-se

Published : Sept. 27, 2012 - 20:39

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Family owners of some business groups are still short of responsible management despite their influential status, according to data held by the antitrust regulator.

“As a large portion families and relatives of conglomerate founders are not registered as board members, it is difficult for authorities to take legal actions against them for irregular practices,” the Fair Trade Commission said in a statement on Thursday.

Further, the average proportion of top owners registered as board of directors to the total board members in 46 major business groups stood at 2.7 percent, or 157 individuals, this year, down from 2.9 percent a year before.

Samsung Group has only one individual from its top owner’s families or relatives out of 354 board members, at 0.28 percent, the lowest proportion among the 46 groups.

Mirae Asset Financial had the second lowest with 1.28 percent, followed by LG Group with 1.48 percent, Dongbu Group with 1.91 percent and Hyundai Heavy Industries with 2.73 percent.

In contrast, Booyoung Group was found to hold the highest ratio of family owner board members. The number of its board of directors from families or relatives reached 17 out of the total 55, recording 30.9 percent.

“While the FTC is striving to weed out irregularities at large companies, some family owners’ positions allegedly evading responsibility is undermining the policy,” an FTC official said.

FTC chairman Kim Dong-soo is focusing on policies to prevent big firms from bullying subcontractors.

Kim recently notified the CEOs of his policy to enhance oversight of three major irregular practices ― unreasonable price cuts for manufacturing parts, technology theft and making orders without written documents.

He also reiterated the importance of “shared growth” between conglomerates and small enterprises.

Over the past few months, investigative authorities such as the FTC and the National Tax Service have been broadening the scope of inquiries into several units of major business groups for alleged practices like tax evasion, embezzlement and price fixing.

Conglomerates had enjoyed a favorable investment environment thanks to the “business-friendly” policy of the Lee Myung-bak administration, a research analyst said.

By Kim Yon-se (kys@heraldcorp.com)