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Inter-affiliate trading of chaebol falls 0.3 pct in first half

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(Globalpost/GlobalPost)

SEOUL, Sept. 11 (Yonhap) -- The inter-affiliate trading of South Korea's top 10 conglomerates edged down 0.3 percent in the first six months of 2013 from a year earlier, data showed Wednesday, as the government sought to rein in the economic dominance of family-controlled conglomerates.

The combined inter-affiliate trading of the conglomerates came to 51.3 trillion won (US$47.2 billion) between January and June, compared with 51.5 trillion won in 2012, according to the data compiled by financial information provider Fn Guide and the financial watchdog's online regulatory filing system.

The reduction comes as Asia's fourth-largest economy vowed to end unfair business practices by conglomerates, or chaebol, and to level the playing field for smaller firms, which account for 99 percent of all enterprises in South Korea by number.

Chaebol have long been criticized for awarding lucrative business deals to their affiliates, which critics claim distorted fair market competition and stripped smaller companies of business opportunities.

The data showed that eight conglomerates cut their inter-affiliate trading, while two others increased inter-affiliate trading by more than 20 percent.

Energy and construction giant GS Group slashed its inter-affiliate trading by 48.6 percent to 329 billion won, the data showed.

Hanwha Group, whose businesses range from insurance to construction, also cut its inter-affiliate trading by 36.5 percent to 377 billion won, according to the data.

Samsung Group, South Korea's largest chaebol, slashed its inter-affiliate trading by 6.6 percent in the first six months of this year.

Samsung's inter-affiliate trading stood at 10.1 trillion won between January and June, compared with 10.8 trillion won from the same period last year, the data showed.

The data showed that inter-affiliate trading of Hyundai Motor Group stood at 22.1 trillion won in the first six months, down 1.4 percent from the same period last year.

In April, 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.

Meanwhile, LG Group, which includes LG Electronics Inc., the world's third-largest smartphone maker, increased its inter-affiliate trading by 20.2 percent to 10 trillion won.

Lotte Group, a conglomerate whose businesses range from department stores and discount stores to hotels and fast-food restaurants as well as a construction unit, also saw its inter-affiliate trading jump by 20.7 percent to 1.9 trillion won.

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