South Korea: Regulator to audit risk management systems of financial units of chaebol
Source: Asia Insurance Review | Jul 2019
The financial regulator has said that it will place the financial affiliates of family-run business conglomerates, or chaebol, under closer scrutiny next year, in a bid to better assess their risk management and emergency backstops.
Financial Services Commission chairman Choi Jong-ku made the remarks at a meeting in June with chief executives of financial institutions controlled by chaebol, reported the Yonhap News Agency. They included Samsung Life Insurance, Hanwha Life Insurance, Mirae Asset Daewoo, Kyobo Life Insurance, Hyundai Capital, DB Insurance and Lotte Card.
During the meeting, Mr Choi cited excessive intra-affiliate transactions among non-financial affiliates and opaque capital injections as risks facing financial affiliates of chaebol.
He urged the financial entities to “set up pre-emptive and practical risk management processes that are needed for sustainable management and growth”. A