COMMON-LAW SPOUSES OF CONGLOMERATE CHAIRS

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Common-law spouses of conglomerate chairmen will be recognized as relatives and subject to regulations. But the government's push to allow companies have chairpersons with foreign citizenship was thwarted.

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SK Group Chairman Chey Tae-won lives with a woman surnamed Kim in common law marriage. They are known to have children. But Kim has not been affected by the fair trade act, since she is not a legally recognized spouse. The Fair Trade Commission issued an advance notice of an enforcement ordinance that will include common-law spouses in relatives if they have a child with those who they live with. Those included as relatives of conglomerate chairpersons are subject to regulations prohibiting business favors and limiting mergers and acquisitions.

[Soundbite] Yoon Su-hyun(Vice Chair, FTC) : "There are legal blind spots, as common-law partners are excluded from specially related parties even when they hold shares and assist a corporate control."

Instead, the fair trade watchdog will reduce the scope of kinship. Under the change, fourth cousins by blood and third cousins related through marriage will be recognized as their relatives. Once this revision is implemented, the number of relatives related to the owners of the nation's top 60 chaebols will decrease by half. The government's push to allow corporations to appoint chairpersons with foreign citizenship has been thwarted. Coupang was designated as a large corporation last year. But its founder Kim Beom-seok could not become the head of the company, since he is a U.S. citizen. The FTC promoted a measure to allow businesses to appoint foreigners as their heads. But it was excluded from the revision, after concerned government agencies had asked for reconsideration out of concerns about possible trade disputes with the U.S.

[Soundbite] Prof. Lee Chang-min(Hanyang Univ.) : "Some multinational corporations move headquarters or holding companies to tax havens. Regulations against business chairpersons with foreign citizenship should be improved as early as possible."

But the latest revision will significantly ease regulations on businesses. For example, companies managed by outside, non-executive directors will not be regarded as their affiliates. Corporations will also be able to incorporate small-sized venture startups as subsidiaries more easily. While easing regulations overall, the revision strengthened rules regarding common-law spouses of business group owners.