Designation of Six Financial Complex Corporate Groups Including Samsung, Hanwha, and Hyundai Motor

Financial Services Commission Meets All Requirements... Promotes Sound Management and Enhances Internal and External Credibility

[Asia Economy Reporter Kwangho Lee] Six companies?Samsung, Hanwha, Mirae Asset, Kyobo, Hyundai Motor, and DB?have been designated as financial conglomerates this year. Going forward, these six corporate groups must select a representative financial company by considering the equity relationships, total assets, and capital of their affiliated financial companies. They must also regularly inspect and evaluate risks at the group level and independently implement internal control, risk management, and internal transaction management.

The Financial Services Commission (FSC) held its 13th regular meeting on the 13th and announced the designation of these six corporate groups as financial conglomerates for this year.

The FSC judged that the six corporate groups fully meet the designation requirements under the Act on the Supervision of Financial Conglomerates.

On the other hand, among corporate groups with assets exceeding 5 trillion won, those whose non-core financial business assets are below 5 trillion won were not designated as financial conglomerates.

Five corporate groups?Daou Kiwoom, Eugene, Taekwang, Kakao, and Hyundai Marine & Fire Insurance?fall into this category, and there is potential for them to grow into financial conglomerates if the asset size of their non-core businesses increases in the future.

The six corporate groups must select a representative financial company within one month by considering the equity relationships, total assets, and capital of their affiliated financial companies and report this to the Financial Supervisory Service.

Additionally, from January 14, 2022, they must regularly inspect and evaluate capital adequacy at the group level and independently implement internal control, risk management, and internal transaction management.

In this regard, they must transparently disclose important information that financial consumers need to know and report it to supervisory authorities.

An FSC official stated, "This designation is expected to positively influence the enhancement of internal and external credibility by inducing sound management of the six corporate groups. By preventing risk occurrences at the corporate group level, it will serve as a cornerstone for financial market stability and the protection of financial consumers."

Meanwhile, the FSC plans to designate financial conglomerates every July. Even if the total assets temporarily fall below the designation criteria, the designation will not be lifted for up to one year if they maintain at least 80% (4 trillion won) of the asset standard to ensure legal stability. However, if the total assets of non-core businesses are below 5 trillion won or if the assets of insolvent financial companies exceed 50% of the total assets of the financial conglomerate, the group will be excluded from designation as a financial conglomerate.

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