Fair Trade Commission Sanctions IS Dongseo and Affiliates for Illegal Stock Holdings

Violation of Holding Company Activity Restrictions
Ownership of Common Affiliate Shares

[Image source=Yonhap News]

Three companies, including IS Dongseo, were sanctioned by the Fair Trade Commission for violating regulations prohibiting ownership of affiliate stocks.

On the 26th, the Fair Trade Commission announced that it would impose corrective orders and fines totaling 1.839 billion KRW on IS Dongseo, SLL Jungang, and Inseon ENT for violating holding company activity restrictions.

According to the Fair Trade Commission, IS Dongseo, a subsidiary of IS Holdings, held 25 billion shares of Asteran Milestone Private Equity Partnership, a domestic affiliate company that is not a grandchild company, from November 2021 to February 2023, and held 5.4515 billion shares of CAC Green Growth No.1 Private Equity Partnership from October 2022 to June 2023.

Inseon ENT, a grandchild company of IS Holdings, owned 3.5435 billion shares of CAC Green Growth No.1 Private Equity Partnership from October 2022 to June 2023.

SLL Jungang, a subsidiary of Contentree Jungang, owned 5 billion shares of Beyond Music No.1 Private Equity Partnership, a domestic affiliate company that is not a grandchild company, from April 2021 to March 2023.

The Fair Trade Act prohibits subsidiaries of general holding companies from owning shares of domestic affiliate companies other than their grandchild companies, and also prohibits grandchild companies from owning shares of domestic affiliate companies. This is to maintain the foundation of the holding company system, which aims to establish a simple and transparent governance structure through vertical investment.

The Fair Trade Commission determined that IS Dongseo and the other two companies violated the stock ownership prohibition regulations stipulated in the Fair Trade Act and decided to impose sanctions.

The Fair Trade Commission stated, "We will continue to monitor violations of the law to ensure that institutional measures designed to enhance transparency in ownership and governance and strengthen management accountability operate smoothly."

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