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Families of chaebol heads serve as execs at multiple units

2018/05/30 08:55

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SEOUL, May 30 (Yonhap) -- Many families of South Korean conglomerates' heads serve as registered executives at several subsidiaries, raising concerns over the abuse of their status, a corporate tracker said Wednesday.

According to CEO Score, 10 out of the 320 family members of the top 100 conglomerates' chiefs, who take part in management, doubled as registered executives at 10 or more subsidiaries as of end-March.

Family-controlled conglomerates are called chaebol in South Korea, and their chairmen are often referred to as "owners." The founding families usually control top managerial positions with only a handful of stakes through a web of cross-shareholdings among subsidiaries.

Woo Oh-heun, chairman of construction giant SM Group, topped the list as he was registered as executives at 36 group units. The group had 68 subsidiaries under its wing at the end of March.

According to the findings, 108 family members of the group owners, or about one-third of the total, were registered as executives at two or more group affiliates. The average number of group units where they were registered executives came to five.

CEO Score said several of the conglomerates are exempt from a ban on inter-affiliate trading, sparking worries about the possible abuse of their power in corporate decision-making.

Chaebol owner families are often under fire for easily netting large profits by having subsidiaries award lucrative contracts to each other, undermining the principle of fair competition.

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angloinfo.com