Under the regulations, largest shareholders of financial companies need to be assessed for their suitability. Assessment categories include whether the subject has violated laws, and those found wanting will penalized through measures such as limited voting rights. The results are expected in May 2017.

A majority shareholder who has been found guilty of violating tax, fair trade, and other financial regulations within the past five years, will be ordered to make amendments or have the voting rights of his her shares will be reduced by 10 percent for up to five years.

When a company, not an individual, is the largest shareholder of a financial company, the chief of the group the company belongs to will be assessed. 

According to Chaebul.com, a website specializing in South Korean conglomerates, total of 64 financial companies come under the regulations.

By group, eight Samsung Group companies, five Hyundai Motor Group companies, six Hanwha Group companies will be assessed for the suitability of their largest shareholders. In addition, four Lotte Group companies, five Hyundai Heavy Industries subsidiaries, five Dongbu Group firms and SK Group’s SK Securities will be subjected to the assessment.

By Choi He-suk (cheesuk@heraldcorp.com)