Spare Money for Additional Investment: Zero

Out of five companies that are currently restricted by the government’s limited total investment system, one is reported not to be qualified for additional investment due to the regulation.

In addition, the Fair Trade Commission (FTC) lost in more than six out of the 10 lawsuits it filed for wrongful insider trades, raising the opinion that the FTC was excessively investigating wrongful insider-trading cases.

Rep. Kim Jeong-hoon of the Grand National Party (GNP) reported in the National Assembly inspection of the FTC yesterday that 69 out of 329 companies (21 percent), affiliated with 18 conglomerates, have “zero won” to spare for additional investment.

The limited total investment system aims to regulate companies affiliated to conglomerates with assets of over 5 trillion won so that they cannot own more than 25 percent of their assets in their own group stocks. Regarding this, the FTC explained that “most of these companies, except a few, still have enough spare money to invest. Even those without spare money can easily invest if they are applied as exceptions in the regulation or admitted as exceptions.”

Rep. Lee Han-gu of the GNP revealed that the FTC has lost in 34 out of the 54 lawsuits (63 percent) it filed for wrongful insider trading from 1988 to the end of September this year, excluding 11 cases currently pending in the high court.

Rep. Lee Geun-shik of the Uri Party pointed out that “one out of two companies that the FTC imposed fines on is moving toward filing lawsuits to object to the decisions. It is not desirable that all the lawsuits lost by the FTC are brought to the Supreme Court.”

Chi-Young Shin Yong Park higgledy@donga.com parky@donga.com