Fair Trade Commission Sanctions Four Companies Including Huons Global for "Holding Financial Company Shares by Holding Companies"

[Sejong=Asia Economy Reporter Kwon Haeyoung] The Fair Trade Commission announced on the 12th that it has imposed sanctions on four companies, including Huons Global, for violating the regulation that general holding companies cannot hold shares of domestic companies engaged in finance and insurance.

The Fair Trade Commission imposed corrective orders (on Huons Global and Golfzon Newdin Holdings), fines (2 million KRW on Huons Global), and warnings (on Ildong Holdings and its subsidiary Lutek) for violations of the Fair Trade Act by Huons Global, Golfzon Newdin Holdings, Ildong Holdings, and its subsidiary Lutek.

Huons Global is accused of violating the law by holding 10,980 shares of Ebest Investment & Securities, a financial company, for eight months starting from June 2019 after converting into a holding company in August 2016. Golfzon Newdin Holdings was found to have owned 100,000 shares of Daeduck Investment, a financial company, until last month despite the two-year grace period ending in June 2017 after becoming a holding company.

The Fair Trade Act, based on the principle of separation of finance and industry, prohibits general holding companies from holding shares of domestic companies engaged in finance and insurance. However, if the holding company or its subsidiary held shares of affiliates or financial/insurance companies at the time of becoming a holding company or subsidiary, a two-year grace period is granted.

The Fair Trade Commission also issued corrective orders to Ildong Holdings and its subsidiary Lutek. Both companies violated the law by owning 230,000 and 40,000 shares respectively of their affiliate Ibex Medical Systems after the grace period had expired following their conversion into a holding company and subsidiary.

General holding companies are prohibited from holding shares of domestic affiliates other than their subsidiaries, and subsidiaries of general holding companies are prohibited from holding shares of domestic affiliates other than their subsidiaries' subsidiaries. This is to simplify and make the governance structure transparent through the holding company system.

This content was produced with the assistance of AI translation services.