The legal group of Samsung and Lotte Group have been changed to Lee Jae-yong, vice chairman of Lee Jae-yong from Lee Kun-hee and Shin Dong-bin, as the chairman of Lotte group. The pressure from the competition authorities is expected be even greater as these two groups are able to directly ask the vice president and the new president for legal responsibilities. Especially, Samsung Group is likely to complete the restructuring of the remaining four ring bonds by the end of this month with the appointment of the vice chairman.

The Fair Trade Commission has appointed 60 corporations with total assets of more than KRW 5 trillion (as of May 1, 2018) as the group subject to disclosure, and the same person (total number) of Samsung Group and Lotte Group as vice chairman and Shin Dong Bin Respectively.

The Fair Trade Commission ruled that the vice chairman is in fact the top group in the group`s governance structure when Lee Kun-hee, the same person in the Samsung Group, is being soldier. Besides, Lotte`s same-minded change is based on the conclusion that Shin Dong-bin is at the cusp of corporate governance.

Meanwhile, Kim Sang-joo, chairman of the Fair Trade Commission, pointed out, "The same person is judged on the basis of two requirements, stakeholder`s requirement and dominant power requirement," after investigating Samsung and Lotte & Naver. However, there is no change in the affiliated company due to the same change in the two groups, Kim stated. Besides, Chairman Kim said that he received a response saying, "It is impossible to communicate voluntarily" as a result of medical consultation with Lee Kun-hee and the new general director general.

The biggest change due to changes in the number of shares is that the vice chairman is now expected be liable for legal liability if Samsung`s affiliates violate regulations such as the prohibition of corporate profits. In the case of the FTC, this vice-chairman can be regarded as a party to legal responsibilities, thereby ensuring the effectiveness of regulation.

It is expected that Samsung will eliminate the four circulating shareholding bonds as early as the middle of this month in addition to the designation of the total number of shares. It is due to Samsung has announced its policy of resolving the circulating shareholding ring and that the meeting with Samsung executives including the vice chairman is scheduled for this month.

Samsung will see the company join in the reform of the chaebol by releasing the ring before meeting with Kim and it is within and outside the industry that the FTC`s blades will soon be able to head to the vice chairperson.

On the other hand, the FTC has designated 60 corporations subject to disclosure increased by three from 57 last year. Meritz Financial, Netmarble and Eugene were newly appointed, resulting in 2083 affiliates. Besides, 32 companies with a total investment of more than KRW 10 trillion were designated as cross-shareholding companies. There are 1322 subsidiaries. The companies subject to disclosure are subject to disclosure and reporting obligations under the Fair Trade Act, and the Act on the Control of the Total Family Income and Expenditure is applied. Cross-shareholding Restrictions in addition to the regulations, cross-shareholding restrictions, cross-shareholding restrictions, and financial and insurance company voting rights are limited. In addition, the FTC reassigned the former chairman of the board of directors from former Naver.

Sejong city=By Kwon Dae Gyung kwon213@


[ copyright ⓒ The Digitaltimes ]