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Last Updated:  Tuesday, 4 March, 2003, 06:26 GMT
Korea in 'chaebol' crackdown
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Chaebols have a tight grip on the South Korean economy
South Korea's four biggest business groups - known as chaebols - will be investigated for illegal dealings by the country's anti-trust watchdog.

President Roh Moo-hyun, who took office last week, pledged to restructure South Korea's family-run business empires.

The Samsung, LG, SK and Hyundai groups will be investigated by the Fair Trade Commission starting next month.

The four chaebols were last investigated three years ago.

"An investigation is inevitable because they are still engaged in illegal cross-unit transactions," said the FTC's chief investigator Chang Hang-seok.

The commission will also investigate seven major state corporations including Korea Power Electric and Korea Gas in the third quarter, he said.

Economic burden

The chaebols' grip on South Korea's economy is blamed for the country's inability to deal with the 1997-98 Asian financial crisis.

President Roh has called for new rules to stop the chaebol's leaders from illegally transferring wealth to their children

In late February, the chief executive of SK group was the first chaebol head to be arrested and jailed on misappropriation charges.

The multi-billion-dollar collapse of Daewoo, once South Korea's second-largest conglomerate, in the 1990s is seen as symbolic of the problem with chaebols.

The whereabouts of Daewoo's former chairman Kim Woo-choong is still unknown.




SEE ALSO:
Tests ahead for S Korean leader
25 Feb 03 |  Business
Korean business bosses arrested
23 Feb 03 |  Business


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