Asset Standard for Limit System on Amount of Investment to be Raised to Six to Seven Trillion Won

The government and the ruling Uri Party decided to revise upwards the standard of aggregate assets of large conglomerates, which are subject to a limit system on their amounts of investment, to six to seven trillion won by one to two trillion won from the current five trillion won.

In addition, they will also review whether to maintain a policy for one or two more years in which a company whose debt ratio is lower than 100 percent is exempt from the limit system on the amount of investment.

The government and the ruling Uri Party are planning to have a high-level party-government consultative conference on February 14 in the National Assembly with the participation of Kang Bong-gyun, senior vice chairman of the policy committee, Lee Gye-ahn, senior member of policy coordination, and Gang Chul-gyu, chairman of the Fair Trade Commission, to discuss the revision of an enforcement ordinance of the fair trade law.

A Uri Party lawmaker with the National Assembly State Affairs Committee (SAC) said on February 13, “An upward revision of the standard of assets for the limit system on the amount of investment by some 2.0 trillion won from the current level would help large conglomerates which could not make an investment due to the standard,” adding, “The Fair Trade Commission says that the standard could be raised up to 6.0 trillion won, but 7.0 trillion would be possible depending on the discussion between the government and the ruling party.”

In addition, the government also decided to extend the existing standard (to expire in April) for another one or two years under which companies whose debt ratio is lower than 100 percent would not be subject to the limit system on the amount of investment.

An official with the policy committee of the Uri Party said, “Samsung and Lotte are not subject to the limit system on the amount of investment as their debt ratios are lower than 100 percent and there is a prevailing voice that such practice should be extended for another one or two years.”

Meanwhile, lawmakers with the SAC will also attend a consultative conference on February 14, leading to prediction that there will be a heated debate over a revision of the enforcement ordinance of the fair trade law.

An Uri Party lawmaker with the SAC said, “The ruling party managed to have related laws passed in the National Assembly last year. A revision even before enforcement could invite criticism that the government is trying to take sides with the chaebols.”

Young-Hae Choi yhchoi65@donga.com