South Korea's parliament on April 02 approved a proposal to ease restrictions on equity investment within the country's top business groups amid some criticism that tough regulations had hindered domestic investment.
A parliamentary official said the house passed revisions to an anti-trust law that free 321 companies from previous regulations which had limited a company's investment stake in other companies to less than 25 percent of its net assets.
Only 22 companies will now be subject to the restrictions because the rule now only applies to conglomerates with assets worth more than 10 trillion won ($10.65 billion) each, compared with more than 6 trillion won in the past.
The regulation was designed to stop family-run conglomerates, such as Samsung Group, from using a complicated web of cross-ownership structure to control their publicly traded units, sometimes damaging the interest of minority shareholders.
At the same time, the revised bill raises the ceiling on equity investment in other companies to 40 percent of a company's net worth from 25 percent, said an official at the country's anti-trust watchdog agency.
The Fair Trade Commission initiated the revision.
South Korea's dominant business groups, so-called chaebol, have powered the development of Asia's third-largest economy but their uncontrolled borrowing and past business practices were partly blamed for sending the country close to bankruptcy during the 1997-1998 Asian financial crisis.
Local business groups have welcomed the move, which the commission expects to take effect later this month, saying the revision would improve the ability of companies to invest.
But many of top local companies will remain subject to the investment cap, including chip maker Samsung Electronics Co Ltd, carmaker Hyundai Motor Co, refiner SK Corp, mobile carrier SK Telecom Co and retailer Lotte Shopping Co.
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