watch list-biz groups

SEJONG, April 1 (Yonhap) -- South Korea's antitrust watchdog said Monday that it has placed a total of 62 business groups on its watch list, restricting their affiliates from making mutual business investment and loan guarantees.

The number is down from the previous year's 63. It is the first time the number has fallen since the related regulation was introduced in 2009, according to a report by the Fair Trade Commission (FTC).

Under South Korea's fair trade law, affiliates of large business groups with assets of 5 trillion won (US$4.5 billion) or more are restricted from making equity investments in or offering loan guarantees to one another.

Hansol and AmorePacific were newly included on the list, while three other business groups including Taihan Electric Wire were excluded, the report showed.

The number of their affiliates subject to the regulation also dropped to 1,768 from 1,831 tallied a year earlier.

The decline is attributed to mergers and acquisitions and structural reforms under way at many business operations.

POSCO saw the number of its affiliates drop by the largest amount of 18, followed by SK with 13 and NongHyup with 7. STX and Samsung came next with five, according to the report.

Meanwhile, the average assets of the 62 business groups came to 34 trillion won, up 2.6 trillion won or 8.3 percent from a year earlier. Their debt ratio dropped 4.9 percentage points to 108.6 percent.

Their average sales rose 1.6 trillion won or 6.9 percent to 24.8 trillion won, while their average net profit shrank 6.1 percent to 0.93 trillion won, the report showed.

"The data showed that their financial health has improved but profitability has more or less deteriorated apparently due to the economic slowdown," the FTC explained.

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