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Conglomerates' nonprofit arms hold 5 tln won in shares: data

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(Globalpost/GlobalPost)

SEOUL, Sept. 2 (Yonhap) -- Nonprofit arms under South Korea's top business groups held 5 trillion won (US$4.5 billion) worth of shares as of August, data showed Monday, urging the authorities to intensify oversight for transparency.

Three nonprofit arms of Samsung Group saw their stock assets reach 2.7 trillion won at end-August, taking up 57 percent of all assets held by 19 conglomerate-linked charities, according to the data by Chaebul.com.

Hyundai Heavy Industries Co., South Korea's leading shipbuilder, held two nonprofit bodies with a combined 549 billion won in stock assets, trailed by Lotte Group with 383.5 billion won and Hyundai Motor Group with 359.2 billion won.

The market researcher added that LG Group's nonprofit arms also held 286.3 billion won, followed by Hanjin Group with 179.3 billion won and Doosan Group with 148.8 billion won.

On average, the tallied nonprofit organizations held 0.47 percent of the combined shares issued by their conglomerates, accounting for around half of the 0.92-percent average stake held by groups' chairmen.

Market watchers said financial authorities should expand surveillance over the nonprofit arms as they could be used to maintain voting rights of groups' chairmen, and also be used as a means of inheritance.

"(Authorities) should set up regulations to regulate nonprofit bodies' exercise of voting rights and bolster their financial transparency," said Oh Deok-Kyo, a researcher at the Corporate Governance Service.

At end-2012, the combined amount of assets held by nonprofit bodies under the top 10 business groups came to 6.8 trillion won, with shares accounting for nearly 70 percent of the total.

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