Fair Trade Commission Investigating Camouflaged Business Holdings

The Fair Trade Commission (FTC) is investigating 105 affiliated companies of 33 conglomerates, which own two trillion won in assets and are under cross-funding restrictions. The conglomerates are suspected of camouflaged holdings of business firms.

Among the companies under investigation are Doosan, which is currently involved in a fraternal dispute over management rights, and Samsung, which was involved in the “X-file” incident.

The FTC said yesterday that written questionnaires had been sent to 105 companies suspected of having camouflaged affiliates last month, and that it was examining the questionnaires.

The 33 conglomerates, to which the 105 affiliates belong, include Hyundai Motors, LG, SK, GS, Kumho Asiana, Dongbu, and other big corporations which rank higher in business world, as well as Samsung and Doosan.

According to the FTC, regarding the Doosan Group, Nefs, which was known as a camouflaged affiliate of Doosan by a petition from ex-chairman Park Yong-oh, is included in the subject companies. Taemaek, indicated as another camouflaged affiliate, will find it difficult to avoid investigation as suspicions concerning it have already been revealed.

The FTC is planning to complete the questionnaire examination by this month and to begin on-spot investigations from the end of August.

Regarding business groups found to have camouflaged affiliates, the FTC will have them officially incorporate the affiliates. The FTC will just warn companies with minor violations, while they will file a complaint with prosecutors against companies with serious violations.

Chang-Won Kim changkim@donga.com