HYBE joins chaebol watchlist

May 16, 2024, 10:54 am

print page small font big font

facebook share

tweet share

HYBE Chairman Bang Si-hyuk (left) and Coupang Chairman Kim Bom-suk

AsiaToday reporter Lee Jung-yeon 

HYBE, the K-pop giant housing BTS and NewJeans, has become the first Korean entertainment firm to be designated a conglomerate by the South Korean antitrust regulator.

Bang Si-hyuk, the founder and chairman of HYBE, has been named as “same person,” a term used by the Fair Trade Commission (FTC) to refer to individuals or legal entities effectively controlling a group of businesses. Meanwhile, South Korean e-commerce giant Coupang’s founder and CEO Kim Bom-suk avoided being designated as ‘same person.’

The FTC announced on Wednesday that it will designate a total of 88 business groups to the watchlist this year, with seven new additions collectively comprising 3,318 affiliates. 

The new additions include Hyundai Marine & Fire Insurance, Yongone, HYBE, SONO International, Paradise Group and more. The increase in the number of companies on this year’s watchlist came as entertainment, leisure and tourism industries, among others, have grown markedly thanks to the rising popularity of Korean culture and recovering consumer sentiment after the COVID-19 pandemic, the regulator said. 

Affiliates of conglomerates with assets exceeding 10.4 trillion won are restricted from making equity investments in their affiliated companies or offering loan guarantees to each other, and 48 business groups were subject to the regulation for this year. EcoPro, a leading Korean producer of secondary battery materials, and Kyobo Life Insurance were newly added to the list, while Daewoo Shipbuilding & Marine Engineering and Hankook and Company have been excluded from the list last year. 

Kim Nam-jung, the chairman of Dongwon Group, has been officially designated as the “same person” of Dongwon Group about a month after his promotion to the position.

The FTC has made it possible to avoid designating an individual as the “same person” if the conglomerate’s scope remains the same regardless of whether the “same person” is an individual or legal entity, the individual controlling the conglomerate does not invest in domestic affiliates other than the top company, the individual’s relatives do not invest in or participate in management of domestic affiliates, and if there are no debt guarantees or loans between the individual controlling the conglomerate, their relatives, and the domestic affiliates.

Some are concerned about whether regulations on private interests, such as giving all the work of the owner’s family, will work properly.

In response, the FTC said, “The same person will be designated as a legal entity for a business group that has formed a governance structure that has been blocked from concerns about extortion of private interests, so it will induce the implementation of a transparent governance structure.”

#HYBE #Bang Si-hyuk FTC #chaebol 
Copyright by Asiatoday