Transition team seeks tighter scrutiny of conglomerates

The transition team of President-elect Park Geun-hye is considering expanding the rights for government agencies to file complaints with prosecutors against malpractices by conglomerates.

The Fair Trade Commission, the country’s antitrust watchdog, has had the exclusive right to do so against corporate violators.

But the team is also seeking to disperse this power to the Small and Medium Business Administration, the Board of Audit and Inspection, the Public Procurement Service and the Anti-Corruption and Civil Rights Commission, news reports said.

This comes as President-elect Park is seeking to eradicate unfair acts by conglomerates in the local market in an aim to sustain economic growth by boosting support for small and medium-sized enterprises as well as consumers.

This is in line with her economic democratization policy that seeks to strengthen antitrust regulations and prohibit further cross-shareholdings by conglomerates.

Also, criticism against the antitrust regulator has grown over the years for failing to properly implement disciplinary measures despite holding such exclusive power.

In a policy briefing to the team Tuesday, the FTC presented a set of safeguard measures to support the incoming government in increasing protection for SMEs against conglomerates.

Park’s team is looking to adopt multiple monitoring and regulatory systems against big businesses, allowing other agencies such as the SMBA to decide for themselves on filing complaints with the prosecutor.

The Financial Services Commission, the country’s financial policymaking body, also delivered a briefing to the team, in which it shared ideas on ways to help credit delinquents come out of debt through debt settlement programs.

The team reportedly has not discussed the restructuring of the regulatory body.

The president-elect said that Korea needs to fix rising household debt as a means to improve its economic fundamentals as it is weighing on its sustainability, as well as establishing a unit restructured out of the FSC solely to protect consumer rights.

Policy suggestions included setting up a fund to acquire bad loans, then allowing debtors to repay at low interest rates over an extended period of time.

By Park Hyong-ki (hkp@heraldcorp.com)