More conglomerate subsidiaries put on investment watch list

SEOUL, Sept. 11 (Yonhap) -- South Korea's antitrust watchdog said Thursday that it has included 17 more subsidiaries of local conglomerates in a list of companies subject to intra-group restrictions on equity investment and loan guarantees.

The Fair Trade Commission said a total of 1,031 subsidiaries of large companies
such as Samsung, Hyundai Motor and LG have been put on the watch list as of Sept.
1 -- up from 1,014 a month earlier.

The increase stemmed mostly from the establishment of new companies under large
conglomerates during the month, the watchdog said.

South Korea bans subsidiaries of conglomerates with assets exceeding 5 trillion
won (US$4.5 billion) from making intra-group equity investment and loan
guarantees. The asset ceiling was raised from 2 trillion won to the current level
in July.

The ban is designed to prevent the distortion of conglomerate governance
structures, but the government eased the asset threshold as part of an effort to
reduce regulations on corporate activities.

Meanwhile, the number of conglomerates subject to the investment restrictions
remained unchanged at 41 from a month earlier, according to the watchdog. The
number almost halved in July due to the eased rule.