Cross-shareholding among large biz groups strengthens: FTC report

SEJONG, May 30 (Yonhap) -- Cross-shareholding among affiliates of large business groups in South Korea has been strengthened over the past year, the country's antitrust watchdog said Thursday.

Cross-shareholding refers to a tactic frequently used by conglomerates or chaebol that enables a handful of the owner's family members to control the entire business group with small stakes through circular shareholding methods.

According to a report by Fair Trade Commission (FTC), 14 business groups maintained cross-shareholding structures among their affiliates as of April. One conglomerate, Hansol, was added to the list compared with a year earlier.

The result was based on its analysis of the ownership structures of 62 conglomerates with assets of 5 trillion won (US$4.4 billion) or more.

Five groups, including Lotte, Hyundai and Tongyang, were those whose cross-shareholding structure got strengthened over the past year, as shareholding ratios among affiliates increased or they made additional circular investments.

In particular, in the case of Halla Group, it was found that one of its affiliates, Mando, helped another struggling affiliate, Halla Engineering