Nongshim Newly Designated as Large Business Group by Fair Trade Commission... "Only Food Company"

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[Asia Economy Reporter Eunmo Koo] Nongshim has joined the ranks of large corporations by being included in the publicly disclosed business groups designated by the Fair Trade Commission (FTC).

The FTC announced on the 27th that it plans to designate 76 business groups (with 2,886 affiliated companies) as publicly disclosed business groups effective from the 1st of next month.

Nongshim was newly designated after surpassing total assets of 5 trillion KRW. Among the eight newly designated groups this time, Nongshim was the only one included from the distribution industry. The FTC designates a business group as a publicly disclosed business group (large business group) if its total assets on the balance sheet of the previous fiscal year exceed 5 trillion KRW, and as a mutual shareholding restricted business group if the assets exceed 10 trillion KRW, every May.

As of last year, Nongshim has a total of 24 affiliates, with total fair assets amounting to 5.05 trillion KRW. Nongshim owns 4 listed companies and 40 unlisted affiliates. Since the FTC’s large business group criteria are limited to domestic companies, 20 overseas subsidiaries were excluded.

Once designated as a publicly disclosed business group, affiliated companies are subject to disclosure and reporting obligations under the Fair Trade Act, as well as regulations on the unfair profit extraction by the controlling family. Companies belonging to mutual shareholding restricted business groups are additionally subject to prohibitions on mutual shareholding, circular shareholding, debt guarantees, and restrictions on voting rights in financial and insurance companies.

Accordingly, starting in May, Nongshim must submit a report to the FTC containing details such as the company’s name, capital, total assets, an overview of the company, the number of shares owned by affiliated companies and special related parties, and the status of domestic company stock ownership.

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