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Six in top 30 conglomerates to cut investment: biz lobby

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(Globalpost/GlobalPost)

SEOUL, July 9 (Yonhap) -- Six out of South Korea's top 30 conglomerates by assets will reduce their planned investment this year due to adverse economic conditions both at home and abroad, the country's most powerful business lobby said Tuesday.

The Federation of Korean Industries (FKI), however, declined to identify the six conglomerates, citing a confidential agreement with all 30 conglomerates. Also unclear is how much the six conglomerates will slash their investment.

In late June, the business lobby conducted a survey of 30 conglomerates, known here as chaebol, on their investment and employment conditions for the second half of the year.

The 30 largest conglomerates have pledged to invest a combined 120.5 trillion won (US$105 billion) in South Korea this year, according to the FKI that speaks for the country's large businesses.

It said 23 conglomerates told the FKI that they will carry out their planned investment this year while one conglomerate vowed to invest more than it had planned.

The 30 conglomerates said one of the biggest factors that will affect their investment in the second half is whether the global economy recovers. Another key factor is a set of bills meant to tackle chaebol's alleged unfair business practices and level the playing field for smaller firms.

In May, the National Assembly passed a bill calling for stricter punishment for chaebol that abuse their power over smaller firms, such as by forcing price cuts on suppliers.

The FKI, meanwhile, said four out of the 30 conglomerates will hire fewer people than they had planned, citing unspecified difficulties in their businesses.

The 30 conglomerates said a recent extension of workers' retirement age is one of the main issues that has a negative impact on creating jobs for the youth.

In April, the parliament passed a bill calling for raising the legal retirement age of South Korean workers to 60 beginning in 2016.

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http://www.globalpost.com/dispatch/news/yonhap-news-agency/130708/six-top-30-conglomerates-cut-investment-biz-lobby