Regulator to toughen rules on inter-trading by subsidiaries

Companies doing business here will face tougher rules on inter-subsidiary dealings from as early as the end of December, antitrust authorities said Sunday.
The Fair Trade Commission on Sunday put a revision to the antitrust law on public notice with an aim to step up its vigilance on illegal inter-affiliate trade.

Currently, 217 companies should disclose the details of their in-house transactions worth more than 10 percent of annual sales or 10 billion won ($8.53 million).

Under the revision, the amount will be tightened to 5 percent of sales or 5 billion won, with the number of companies subject to the surveillance increasing to 245.

“The expansion of surveillance would strengthen voluntary monitoring within the market,” said a FTC official.

The revision also will require companies to report their merger of affiliates before any equity investments are made.

But the current post-inspection will be maintained for some exceptional cases when date and amount cannot be specified in advance.

The leniency program for companies that voluntarily report illegal collusion with affiliates also will be limited in order to prevent abuse among frequent violators, according to the revision.

The FTC said that the revised bill will undergo public hearing by Oct. 17 and take effect at the end of this year after parliamentary approval.

By Lee Ji-yoon (jylee@heraldcorp.com)