Designation Of Top-30 Business Groups To Be Readjusted

The government has reviewed the plan to ease various regulations on the corporate activities such as the designation of the top-30 business groups. And it also plans to reduce the regulations to limit the corporate activities in the provinces such as the regulations concerning the plant construction.

Jin Nyum, Deputy Prime Minister and the Minister of Finance and Economy, directed to review whether there are the deregulation measures necessary for establishing the competitive environment in the staff meeting of the Ministry of Finance and Economy (MFE).

The MFE will set up an improvement plan during next month, after examining the bottlenecks of the business companies within this month.

Regarding this improvement plan, Deputy Prime Minister Jin said in an interview with Donga Ilbo`s reporter that ``because of the designation of top-30 business groups that has regulated the various corporate activities, there has been a bizarre phenomenon that good many companies have tried to avoid to become in the top-30 business groups. Hence, in the near future, the government will introduce the additional deregulatory measures such as the change the number of the top business groups from 30 to 10 according to the improvement of corporate governance``.

``Since some newspapers charged the government`s policy with `the retreat from the Chaebol reform` in the process of establishing the deregulatory measures for strengthening the corporate`s competitiveness, only about 70 percent of the original plan was reflected in the deregulatory policy,`` he added.

Meanwhile, Deputy Prime Minister Jin told in the meeting with the foreign reporters at the government office building in Kwachon, that ``the government will announce the scores of the regulation examination on the corporate activities by city and province such as the regulation concerning the construction of plants within next month. The government will either abolish the unnecessary measures regarding the provincial economic activities, or hand over the treatment of those measures to the provincial governments``.

Jin explained that ``since there have been many problems in the construction law regarding the plant establishment, which the central government entrusts to the provincial governments, the Korean Chamber of Commerce and Industry (KCCI) will establish the improvement plan through a survey of regulatory practices at the provincial governments during July``.

Regarding the ease of the limitations to Chaebols` ownership of banks, Jin said that ``the government will examine the corporate`s ownership structure under the premise in which the Chaebols cannot possess the right of bank business. As of now, there is no alternative other than the government possessing the banks` shares or for the banks to sell their shares to the foreigners. But it is not desirable to introduce the hedge fund, and to study if all top-30 business groups can be seen as the Chaebol``.

Jin stressed that ``the time of the US`s economic recovery and the practices of the domestic economic policies would be the key to decide the time and the extent of the domestic economic recovery. The government prospects that the economic growth rate will possibly reach 6 percent in the fourth quarters of this year``.

Kwon Soon-Hwal shkwon@donga.com