FROM SI NEWS SITE: FYI
S. Korea to Probe Large Business Actions
03/03/2003 23:29:46 EST
The government will investigate South Korea's six largest business groups in the second quarter of the year amid signs of possible illegal transactions among subsidiaries, officials said Tuesday.
Samsung, LG, SK, and three groups that had formerly constituted Hyundai, will be subject to the probe by the Fair Trade Commission, which will scrutinize their practices from January 2000 to December 2002.
Officials have already detected signs of possible illegal transactions in these enterprises, said Chang Hang-suk, the commission's chief investigator.
Late last month, prosecutors arrested Chey Tae-won, head of SK, South Korea's third largest conglomerate, on charges he illegally swapped stocks in subsidiaries to increase his control on the group.
South Korean President Roh Moo-hyun has vowed to eliminate illegal trading that South Korea's leading families often use to strengthen their control of their business empires.
The family controlled conglomerates, called chaebol, were the main driving force of South Korea's economic prosperity. But the country's trouble during the Asian financial crisis of the late 1990s was blamed largely on the conglomerates' unbridled expansion.
South Korea has pushed for reforms of the chaebol, which have dozens of affiliates interlocked by loans and subsidies.
During the Asian financial turmoil, some of the key conglomerates disintegrated under the load of debt. Hyundai, which used to be South Korea's largest conglomerate, has broken into three separate groups led by Hyundai Motor, Hyundai Heavy Industries and Hyundai Engineering & Construction.
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