The Holding Company And Its Regulation In Anti-trust Law

The holding company possesses over fixed rate share of other company andcontrols the management of that company. It accomplishes business rationalization,risk-isolation, streamlined personal management and business diversification throughseparation between ownership and control. For those merits, many countries haveoperated the system of holding company and strengthened business competitiveness.But it may bring concentration of economic power and easily form monopolisticbusiness, so each country regulate holding company in accordance with economicsituation.The holding company appeared in USA in the early 20th century. But it has beenprovided only to public service holding company and financial holding company.Owing to conglomerate-centered business structure Korea and Japan provide formonopoly problem of holding company in the anti-trust law. There is no specialprovision in Germany and the anti-trust law has not enacted yet in China.As the excess concentration problem of economic power, the establishment ofholding company had been prohibited since Korea enacted anti-trust law in 1986. Butafter the financial crisis, for the business restructuring and the promotion of economy,Korean government permitted the establishment of holding company in theamendment of anti-trust law in 1999. With due regard to excess concentration ofeconomic power, it has been provided that the holding company cannot burden excessobligation over total sum of capital, an affiliated company has to hold below 50% ofthe total sum of holding company issued stock, an so on.The state-owned holding company emerged in the process of nationalproperty system reform in China. It aims at separation between governmentand business, increment of national asset value, enhancement of businesscompetitiveness. At the present stage, however, as new system is far fromperfect and the property right relation is vague, so it is hard for state-ownedholding company to realize its goal.Especially, an intervention of administrative market monopolization placeobstacles in the way of making good industrial structure, restrict faircompetition of market economy. Therefore, it is very necessary to regulatestate-owned holding company by anti-trust law.