SEOUL, March 16: South Korea president Kim Dae-jung on Monday ordered the Fair Trade Commission to investigate unfair business practices by local conglomerates.Kim made the remarks after receiving a briefing from the head of Fair Trade Commission (FTC), Chun Yoon-chol.
Chun said the commission would launch an comprehensive probe next month into unfair internal transactions among units of South Korea's top 30 largest conglomerates or chaebol.
The commission will also ban cross payment guarantees among affiliates from next month and clear up such cross guarantees currently worth 33.5 trillion won by March 2000, Chun said.
Fines will be levied on those companies found to have violated the regulations, he said.
The commission would watch out for abnormal costs and stock transfers between units of the same chaebol, he said.
A number of chaebol units in the past have tended to buy products from other units in the same group at higher than retail prices, while group chairmen have at times transferredstock holdings in one affiliated company to another affiliate company at below-market rates, he said.
Chun said the government would eliminate unfair business activities to encourage industrial restructuring by merging or selling off ailing subsidiaries.
Chaebol reforms are an integral part of economic restructuring, which South Korea has pledged to undertake in return for accepting nearly $60 billion in bailout funds arranged by the International Monetary Fund.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
