The head of South Korea’s Fair Trade Commission (KFTC) warned the nation’s top conglomerates that the regulator will be looking into charitable foundations and holding companies for any signs of mismanagement.
On Thursday, November 2, KFTC Chairman Kim Sang-Jo met with senior executives from Samsung, Hyundai Motor, SK, LG and Lotte where he questioned the companies’ willingness to pursue corporate reform and transparency.
During the meeting, Kim described the plans for the regulator’s newly formed corporate department, which was created specifically to investigate South Korea’s largest companies.
The plans include investigations into the chaebols’ (South Korea’s primarily family owned conglomerates) charitable organizations to verify that they are run according to their founding objectives. These charities have been accused in the past of funneling funds into private accounts.
The KFTC’s corporate department will also look into the chaebols’ profit structure at holding companies for any illegal transactions such as holding companies commissioning large amounts of work to affiliates.
Kim said that the corporate department’s “final goal is to collect all of the companies’ public filings, industry reports and investigation reports, and turn them into a meaningful database so that [the commission] can use it to come up with proposals and recommendations that will later turn into corporate policies.”
Full Content: Korea JoongAng Daily
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