Fair Trade Commission Abolishes Holding Company Division... Steps to Downsize Corporate Group Bureau for 'Chaebol Oversight'

Fair Trade Commission Considers Transitioning Holding Company Departments to 'Teams' Amid Staff Reductions

[Image source=Yonhap News]

[Asia Economy Sejong=Reporter Lee Jun-hyung] The Fair Trade Commission (FTC) is downsizing the Corporate Group Division, which was newly established during the Moon Jae-in administration. This reflects the Yoon Suk-yeol administration's national policy emphasis on regulatory reform.

According to related ministries on the 5th, the FTC announced the legislative notice of the "Amendment Ordinance on the Enforcement Rules of the FTC and Its Affiliated Agencies" on the 2nd. The main point of the amendment ordinance is to abolish the Holding Company Section within the Corporate Group Division. Of the 11 personnel in the Holding Company Section, 6 will be reduced, and the remaining 5 will be excluded from evaluation and converted to permanent staff.

The duties of the Holding Company Section will be taken over by the Corporate Group Policy Section within the Corporate Group Division. The temporary Grade 5 position affiliated with the Ministry of SMEs and Startups, which was increased to improve unfair trade between large and small-medium enterprises, will also be reduced as its term has expired. The FTC is considering operating a "Holding Company Team" with the existing 5 members of the Holding Company Section who are excluded from the reduction target.

Kim Sang-jo, Chief of Policy Office, briefing on current issues
(Seoul=Yonhap News) Photo by Lee Jin-wook = Former Blue House Policy Chief Kim Sang-jo is briefing on current issues such as Japan export regulations response, real estate measures, Korean New Deal, and supplementary budget at the Press Center on the afternoon of June 21, 2020. 2020.6.21
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The Corporate Group Division is an organization composed of five sections that formulates and operates policies for large corporate groups within the FTC and is responsible for investigating conglomerates. It was newly established in 2017 when former FTC Chairman Kim Sang-jo, who served as the first head of the FTC under the Moon Jae-in administration, expanded and reorganized the Corporate Group Section within the Competition Policy Bureau. Originally launched as a temporary organization for two years, the Ministry of the Interior and Safety decided in 2019 to "extend for two years and then re-evaluate," and in May last year, the Corporate Group Division was confirmed as a regular government organization.

The FTC states that it will carry out the existing duties of the Holding Company Section without disruption. However, there is a prevailing view that with the section's personnel reduced by more than half and the remaining staff becoming permanent, it will be difficult to fulfill its role. Additionally, government officials expect that since the new administration emphasizes "regulatory reform," there is a high possibility that the functions of the Corporate Group Division, which was established in line with the previous administration's national policy, will be broadly downsized.

In the reason statement for the re-amendment, the FTC said it is "to improve and supplement some deficiencies that appeared in the operation of the current system."

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