Ruling party pushes through three pro-business bills

SEOUL, March 3 (Yonhap) -- The National Assembly's National Policy Committee on
Tuesday passed three disputed economic reform bills calling for the easing of
regulations on investment by large conglomerates in a session boycotted by the
main opposition Democratic Party.
The bills, which would also allow industrial conglomerates to expand their equity
in commercial banks to 10 percent from the current 4 percent and speed up the
privatization of the state-run Korea Development Bank (KDB), passed the
parliamentary committee in a session attended only by committee members of the
ruling Grand National Party (GNP).
The three bills, if approved by the Assembly's Legislation and Judiciary
Committee and plenary session, will take effect.
The current law forbids non-financial companies and industrial groups from
holding more than 4 percent of a bank's shares with voting rights. The new bill
would also allow industrial conglomerates to own up to 20 percent of private
equity funds.
The ruling party is also pushing to abolish regulations that bar conglomerates
with more than 10 trillion won (US$6.5 billion) in assets from investing in their
affiliates or other companies in excess of 40 percent of their net worth. The
so-called investment ceiling scheme was designed to prevent complicated circular
intra-group share ownerships in which a handful of people with small stakes in
companies can control a large number of subsidiaries.
Many of South Korea's largest conglomerates are controlled by shareholders that
own less that 5 percent of all stocks issued.
Another controversial bill that also passed the parliamentary committee calls for
establishing a "Korea Development Fund" in a preparatory move for the
privatization of the KDB.
odissy@yna.co.kr
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