Fair Trade Commission chairman Noh Dae-lae said Monday that the country’s antitrust agency remained steadfast in its determination to amend some of its rules and regulations governing family-run conglomerates for fairer market practices.

It seeks to pass the so-called economic democratization bill at the National Assembly by the end of June to put an end to chaebol owners misusing their companies’ business plans for their own interest, the FTC chief told reporters.

The measures taming chaebol include pushing chaebol owners to be more responsible, as well as prohibiting conglomerates from expanding through new cross-shareholdings and transferring or outsourcing most of their businesses to their subsidiaries.

Noh stressed that these moves were not aimed at hindering business operations or adversely affecting business sentiment, as feared by companies, but to “abolish” a vicious cycle of wrongdoings by large businesses and their suppliers losing out in transactions with conglomerates.

He said that chaebol owners needed to own up to their responsibility commensurate with the number of shares they owned in their groups and subsidiaries.

For instance, a CEO could have a 1 percent stake in a company, but act as if he controls more than 30 percent. In reality, chaebol owners did not take responsibility when faced with allegations of wrongdoings even though they exercised more power than their shareholdings.

The FTC chief said it was imperative that lawmakers pass the amendments in June, otherwise, Korea would lose its momentum on economic democratization, through which President Park Geun-hye is determined to change Korea’s business landscape.

However, the antitrust watchdog will not enforce measures that would make businesses think twice about making investments.

The government’s recently announced measures aimed at boosting investment were an example where antitrust regulations governing equity ties between subsidiaries of group holding companies and other units would be eased.

This would pave the way for subsidiaries’ units to form joint ventures, or the so-called “great-grandson companies,” with foreign business partners with high-tech assets.

Under the current fair trade law, subsidiaries’ units of holding companies are required to wholly own, or hold a 100 percent stake in, great-grandson companies. The government will move to lower the equity ownership cap from 100 percent to 50 percent so that those companies removed from restrictions can attract foreign investors and operate a joint venture partnership.

He also sided with breaking conglomerates’ existing complex web of cross-shareholding structures as part of economic democratization.

However, this would cost too much on the chaebol should the regulator force big businesses to unwind their cross-shareholdings, Noh said, adding that this process would expose them to foreign takeover attempts.

Regarding Namyang Dairy, the FTC chief said that it is investigating the company “by the book” and is almost finished with its probe.

By Park Hyong-ki (hkp@heraldcorp.com)