Three-Year Extension on the Right of Account Tracing of the Fair Trade Committee

The bill to extend the valid date of the Right of Account Tracing (Claim Right for Financial Trade Information) of the Fair Trade Committee for three more years has been confirmed by the government.

The government opened the Cabinet Council on October 22 by the lead of Prime Minister Goh Kun and confirmed the “Laws on Regulating Monopoly and Fair Trade” prepared by the Fair Trade Committee. The bill will be handed in to the National Assembly.

In the amended bill, the Fair Trade Committee has decided to extend the Right of Account Tracing to February 2007 and will decide on the validity of the system again that time. The system was originally to expire in February of next year.

The Right of Account Tracing was originally adopted temporarily to investigate internal unfair trade of the large corporations in 1999 and was extended in 2001. The Fair Trade Committee has been causing friction again against the business world as well as the political world by deciding to extend the valid date of the system one more time.

The amendments include: extending the meeting term of debt percentage (100 percent) of a holding company from one year to two years, acknowledging the two-year disposal time limit of holding stocks of a granddaughter firm (a subsidiary of a subsidiary company), and not allowing the financing between subsidiary companies.

In addition, fine on prearrangements was set to “10 percent of the sales or two billion won,” increasing it by twice, and reports of corporations merging through stock acquisition changed from the after-the-fact to before-the-fact report.

Meanwhile, the prospect for the passing of the amended bill is unsure since the Grand National Party, majority at the National Assembly, decided not to accept the extension bill of the Right of Account Tracing by the Fair Trade Committee.

Ki-Jeong Ko koh@donga.com