On the 11th, CEO Score, a corporate data research institute, surveyed the board review and resolution criteria regarding investments in other companies and the disposal of equity stakes at 212 KOSPI-listed companies belonging to major conglomerates. The results showed that 101 companies—47.6% of the total—required board review even for investments smaller than the disclosure threshold set by the Korea Exchange.
Eighty-six companies (40.6%) had board resolution criteria that were identical to the disclosure standards. In contrast, 25 companies (11.8%) had board resolution criteria that were stricter than the disclosure standards, leading to an assessment that their mechanisms for prior oversight of management were relatively lax.
The current Korea Exchange disclosure standards apply when an investment in another company exceeds 5% of equity capital; for large corporations with total assets of 2 trillion won or more, the threshold is 2.5% or higher.
By group, SK applied board approval thresholds stricter than the disclosure standards at 12 out of 15 listed companies surveyed, the highest number among all groups. SK Innovation(096770)set the threshold for board approval at 1% or more of equity capital and temporarily lowered this to 0.5% starting in November 2024.
SK hynix(000660)set the decision-making threshold at the greater of 1.5% of equity or 100 billion won. SKNetworksCo.,Ltd(001740), SKSQUARE(402340), and SKTelecom(017670)also require board review for transactions exceeding 1.5% of equity.
At LG Corp., 10 out of 11 listed companies applied the strengthened criteria. LGELECTRONICS(066570), LGCHEM,LTD(051910), and LG Energy Solution(373220) require board approval for investments of 100 billion won or more; LG Innotek(011070)requires approval for investments of 80 billion won or more; and LG Corp.(003550) CNS requires approval for investments of 40 billion won or more.
#POSCO, Shinsegae Co.,Ltd(004170), HYUNDAIDEPARTMENTSTORECO.,LTD(069960), and LX Group also applied stricter criteria than the disclosure standards to all affiliated companies under investigation.
In contrast, among the 11 Samsung Group affiliates under review, only two— SAMSUNG C&T CORPORATION(028260)and HotelShilla(008770) —applied the stricter standards. Hanwha Group also applied the stricter standards to only one of its eight affiliates: #Hanwha Vision.
In particular, SamsungHeavyIndustries(010140)and HyundaiMotor Group affiliate INNOCEAN WORLDWIDE INC.(214320)showed the widest gap between their board resolution criteria and the stock exchange’s disclosure standards. Both companies require board review for investments exceeding 10% of equity capital—four times the stock exchange’s disclosure threshold of 2.5%—resulting in the largest disparity among the companies surveyed.
