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SEJONG, July 10 (Yonhap) -- South Korea considers allowing exceptions in banning cross-shareholding among large conglomerates, a move aimed at preventing a comprehensive ban from hurting overall business activities, the head of the country's corporate watchdog said Wednesday.
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.
The Fair Trade Commission (FTC) has been pushing to ban additional cross-shareholding sought by conglomerates. The corporate sector has argued that such a ban could stifle its business activities.
"If we ban even the cross-shareholding taking place inevitably in the process of corporate restructuring, it could lead to a collapse of the whole economy," Noh Dae-lae, the head of the FTC, told reporters.
Citing growing demand for corporate restructuring in the shipping, shipbuilding and construction sectors, Noh said there could be many cases in the future where such restructuring efforts result in "unintended" cross-shareholding among companies.
"The economy could come to a halt if we push for a ban on such unintended cases," he added, hinting that the FTC is considering allowing exceptions in enforcing related laws.
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