Opposition party to push for new tax, revival of investment cap on conglomerates
The largest opposition party said Sunday that it would push for the revival of a repealed law that restricts investments of large conglomerates, in a bid to rein in the nation’s large family-owned conglomerates such as Samsung Group.
The Democratic United Party’s corporate reform plan also envisions a new tax on the top business groups, locally called chaebol, and other measures to protect small- and medium- sized firms.
“The concentration of wealth into top 10 chaebol has accelerated over the past decade, which is evidenced by the growth in both their real assets as well as the number of their affiliates,” Rep. Lee Yong-sub, the party’s spokesperson, told a press conference at the National Assembly, unveiling its election platform for the April 11 parliamentary election.
“It is time to revive the equity investment cap (on chaebol) which was intended at preventing the chaebol firms from exerting excessive influence over the local economy through equity investment, as well as restricting them from unbridled business expansion,” he added.
The regulation on chaebol’s equity investments was the subject of much controversy in Korea until it was abolished in 2009 by President Lee Myung-bak, the former CEO of a chaebol company.
Under the DUP’s plan, affiliates of the top 10 conglomerates, including Samsung, LG and Hyundai, would be barred from investing more than 40 percent of their equity in another affiliate or subsidiary. On top of the investment cap, a new tax would be levied on chaebol’s holdings companies on their dividend income from subsidiaries.
The measures, party leaders said, will form the core of the liberal bloc’s pledges in the upcoming election along with universal welfare and more taxes on the rich.
Liberals have long campaigned for chaebol reform, but their drive received a renewed impetus from a widespread public outcry over deepening economic polarization and a middle-class squeeze.
While a few chaebol groups prospered thanks to the government’s growth-oriented polices, the livelihoods of ordinary people continued to deteriorate, many Koreans say.
The ruling Grand National Party is also seeking to toughen regulations on chaebol, although its leader stopped short of stating the need for the revival of the equity investment cap.
By Lee Sun-young (
milaya@heraldcorp.com)
