FTC to investigate irregular inheritances

The Fair Trade Commission (FTC) will conduct an in-depth investigation into venture firms held by 2nd and 3rd generation chaebols such as Hyundai`s Autoever.com and e-Samsung to ascertain whether these companies are being used as an instrument for irregular inheritances and contributions. Probes will also be launched at the restructuring headquarters, separated companies and camouflaged affiliates of the top conglomerates -- Hyundai, Samsung, LG and SK. If needed, account-tracking rights may be exercised.

From August16 to October 14, the FTC will dispatch investigative teams at 36 companies of the 4 groups to conduct probes into illegal internal transactions. The investigation was slated for the end of this month, but due to the Hyundai crisis it was moved up by 2 weeks. As this is the first attempt to eradicate deep-seated chaebol irregularities since the new economic team was put into place, considerable attention is being paid to the issue in relation to the government`s chaebol reform direction.

By group, the investigations will target 12 companies, including the heavy industries, construction and shipping arms of Hyundai, 12 Samsung group companies, 7 LG companies and 5 SK companies. The list was prepared by selecting companies with irregular support for affiliates, venture firms with allegations of support from affiliated entities and companies who conduct large-scale business with separated corporations.

The FTC will focus its investigations on irregular support to separated and venture companies, as well as operations of camouflaged affiliates, infringement of mutual investment regulations, BOD resolutions on large-scale internal transactions, execution of public notification and violation of debt guarantee regulations from January 1999 to the end of July this year.