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June 27, 2019

Calls to toughen rules on property disclosures by chaebol grow

PUBLISHED : April 10, 2019 - 17:51

UPDATED : April 10, 2019 - 17:55

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A South Korean civic activist group on April 10 urged tougher regulations for disclosing the real estate assets of conglomerates to prevent speculation and price hikes.


CCEJ official Kim Hun-dong speaks at a press conference on April 10.
Yonhap


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Real estate assets of 5 conglomerates valued at W80tr

Officials of Seoul-based Citizens’ Coalition for Economic Justice said in a press conference that the Fair Trade Commission should make public information related to property assets of conglomerates by revising related laws.

They called for business groups with assets of over 5 trillion won ($4.39 billion) to disclose information on all the properties they own, including the address, floor area, their book value and publicly assessed land value.

CCEJ’s data showed that five major conglomerates -- Samsung, Hyundai Motor, Lotte, SK and LG -- owned 30 affiliates dedicated to construction, real estate and leasing as of 2017, up nearly fourfold compared to a decade ago. This accounted for 8.1 percent of the combined 369 affiliates as of 2017, whose number has jumped 62.6 percent in 10 years. The combined book value of land owned by the affiliates rose over threefold at 75.4 trillion won in 2017, from 23.9 trillion won in 2007.

The group pointed out that loopholes in the disclosure regulations have caused nonessential affiliates including real estate-related business to flourish. It also emphasized that such problems are likely to nibble away at their core business competence and weaken the national economy.

“The government is responsible for allowing speculation by large business groups in the real estate market,” said Kim Hun-dong, a senior official at CCEJ. “Conglomerates are ripping off tenants after taking over upscale properties, while the production facilities for their core businesses are going overseas.”

Another CCEJ official, Kwon Oh-in, said that due to the lack of proper regulations, large business groups have been concealing property-related information and making undue profits.

By Son Ji-hyoung (consnow@heraldcorp.com)

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