Inter-affiliate trading involving chaebol owners up 10.7 pct in 2012

SEOUL, June 17 (Yonhap) -- Inter-affiliate trading among South Korea's 22 major conglomerates dipped 1.5 percent last year, but trading involving affiliates controlled by their owners' family members increased 10.7 percent, data showed Monday.

The combined inter-affiliate trading of the conglomerates came to 148.5 trillion won (US$131.7 billion) in 2012, compared with 150.8 trillion won in 2011, according to the data compiled by CEOScore, a website that tracks the country's top 10 conglomerates known as chaebol as well as financial firms and state-run companies.

Still, the inter-affiliate trading involving the 87 companies controlled by chaebol heads' family members reached 15.1 trillion won in 2012, compared with 13.6 trillion won in 2011. Chaebol owners' family members hold more than a 30 percent stake in the 87 companies affiliated with the 22 major conglomerates, according to CEOScore.

The data showed that Booyoung Co., a mid-sized South Korean conglomerate, awarded many business deals to one of its affiliates whose major shareholder is a son of Booyoung Chairman Lee Joong-keun.

The affiliate's trading with Booyoung's other units stood at 9.9 billion won in 2012, up 271 percent from 2.6 billion won in 2011, according to CEOScore.

Park Ju-gun, who runs the CEOSCORE website, said it is surprising that some chaebol continue to award many of their business deals to affiliates controlled by chaebol owners' family members.

The latest data comes amid growing calls in South Korea to rein in the economic dominance of family-controlled conglomerates and to level the playing field for smaller firms.

Noh Dae-lae, the chief of the Fair Trade Commission, said earlier this month that he will end unfair business practices by family-controlled conglomerates.

In April, Hyundai Motor group, the world's fifth-largest carmaker, vowed to drastically cut its inter-affiliate trading, a move Hyundai said would offer new business opportunities worth 600 billion won per year to small and medium companies.

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