FKCCI Welcomes Allowing General Holding Companies to Own CVCs

[Asia Economy Reporter Dongwoo Lee] The Federation of Korean Industries (FKI) announced on the 30th that it welcomes the government's policy decision to allow general holding companies, which had been strictly prohibited until now, to own corporate venture capital (CVC).

Bae Sang-geun, Executive Director of FKI, said in a statement on the same day, "However, the purpose of the policy is to help the survival of venture companies facing difficulties and to support future-oriented venture startups," adding, "Since CVCs are allowed only in a limited way, it seems difficult to achieve the originally expected policy effects."

Bae expressed concerns, saying, "In particular, the requirement that CVCs be established as wholly owned subsidiaries of holding companies, the limitation of the debt ratio of CVCs to 200%, and the restriction of external funds to 40% when raising funds are expected to reduce the effectiveness of the policy."

He added, "I hope that through bold deregulation such as expanding autonomy in establishing CVCs, raising the debt ratio, and increasing the proportion of external funds in funds during future National Assembly discussions, the policy will be reborn as an effective one."

Earlier, Deputy Prime Minister and Minister of Economy and Finance Hong Nam-ki presided over the 12th Emergency Economic Central Countermeasures Headquarters meeting and the 30th Economic Ministers' Meeting at the Government Seoul Office, where a plan was decided to basically allow general holding companies to own CVCs.

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