A company’s national identity has become more complex now that the majority of the country’s top 30 enterprises are replete in foreign investment. Overseas investors hold more than a 50 percent stake in some of the largest companies here.

Well-known names such as Samsung Electronics, KB Kookmin Bank, KT Corp., Hyundai Motor, LG Electronics and POSCO are now better identified as “global firms” due to the significant percentage of foreign shareholders.

“Foreign shareholders are now almost a part of the DNA at many major Korean firms, and this is a global trend that’s here to stay,” said Jeong Sun-sup, head of Chaebul.com, a portal dealing with conglomerate issues.

The diversity of shareholders indicates that companies are pushed to become more globally conscious in their business activity, industry watchers say, hence the more effort Korean firms put into social responsibility. 

Shouldering such duties and building an image as a trusted company meeting all the global standards form some of the basic business philosophies for most companies with foreign investors, usually from the more advanced countries.

However, concerns linger about their growing presence.

Jeong of Chaebul.com said companies are growing particularly jittery over overseas pension funds, which do not all have a track record of ideal investment portfolios but are investing in local firms.

“Many of these overseas pension funds are streaming into Korea, and their presence means they would get a bigger say in how companies are operated, and whom to elect as executives,” he said.

Lee Byung-ki of the Korea Economic Research Institute said it may come a day when pension funds become the largest shareholders of some of Korea’s top companies.

Korea’s somewhat phobic attitude toward foreign investors stems from a number of incidents involving these investors that rocked the nation.

Lone Star’s acquisition of Korea Exchange Bank was one, along with the more recent case of the abandonment of Ssangyong Motor by a Chinese automaker, which originally appeared to be interested in making a genuine investment in Ssangyong.

The traumatic experiences have made many Koreans wary of overseas forces seeking business and investing opportunities in Korea.

Adding to the fears of the business circle are the new laws and regulations being proposed by prominent politicians, namely the nation’s top three presidential candidates.

Some are suggesting tightening the rules to limit the voting rights entailing the shares that financial companies hold in their affiliates, a move that organizations such as the Federation of Korean Industries are protesting.

“This would mean that local companies would have their rights compromised, while the overseas investors would have free reign,” the FKI said on the issue, citing that most conglomerates and large companies in Korea are dominated by foreign shareholders.

Others say that there is nothing to fear, as these overseas investors come in all forms and sizes, and their influence would depend on how ready they are to come together on company decisions.

“Unless they all decide to join together in voting on the same side for the same issues, the foreign investors cannot be seen as a unified organization that can really do any harm,” said an official at the Financial Supervisory Service.

Many of these investors, especially the pension funds, also invest under funds or other indirect investment tools, meaning their real identities also are rarely uncovered.

“In particular, the pension funds are searching for a stable and steady source of income for the retirees, so they don’t want to go on a limb, meaning they choose to invest through these tools rather than make investments on their own,” the FSS official said.

Local companies are obligated to state the percentage of overseas shareholders or the voting rights they hold in investor relations, but they are not required to break them down into names, making it more difficult for outsiders to see exactly who the foreign investors are, and where they come from.

By Kim Ji-hyun (jemmie@heraldcorp.com)