Korea’s large family-owned conglomerates encroached on business areas fit for small and medium enterprises, a report by the country’s corporate watchdog said Tuesday.

The Fair Trade Commission report showed 74 affiliates of 22 conglomerates doing business in such areas as retails, import and distribution, and so-called maintenance, repair and operations.

It said of these companies, 17 were owned or managed by the children of the business groups such as Samsung, Lotte and Shinsegae.

The antitrust commission’s findings are based on management and business-related changes observed within the country’s 35 largest conglomerates that are barred from making cross-investments. The changes observed were from April 2007 through April of last year.

The FTC said that during the four year period, the conglomerates, also called chaebol, increased their number of affiliates by an average of about 2.8 companies every year, with the net increase reaching 393.

During this period, 652 companies were incorporated as affiliates of the conglomerates while 259 were spun-off or merged with other firms.

The latest findings showed that Samsung Group, the country’s largest conglomerate, and retail giants Shinsegae and Lotte most frequently infringed in business areas that are appropriate for SMEs. This was followed by GS, CJ and Hyosung.

“These conglomerates had operations in the food and beverage areas, product imports and even in education services,” the state regulator said. It said other were involved in light emitting diode lamp production, publishing and MRO areas.

Of all the new companies belonging to the chaebol, 75.5 percent were in the service sector.

The report comes as the government and general public have started to criticize big conglomerates for entering SME business areas and not doing enough to share the benefits of their success.

The chaebol have generally done well, despite hardships felt by smaller companies, because of their size and ability to export products abroad.

The FTC’s report also showed that in the four years, the increase in affiliates helped push up combined assets and sales of the 35 conglomerates by 10.8 and 13.8 percent, respectively. (Yonhap News)