Kumho Asiana Group was excluded from the list of large business groups designated by the Fair Trade Commission as it sold Asiana Airlines.
The Fair Trade Commission announced on the 28th that it has excluded Kumho Asiana Group from the mutual investment-restricted business groups and the public disclosure target business groups.
The Fair Trade Commission designates large business groups by aggregating the total assets of corporations each year. Inclusion on this list subjects companies to regulations such as the ban on self-dealing, prohibitions on mutual investment, and restrictions on guarantees for subsidiaries' debts.
If the total assets exceed 0.5% of the previous year's nominal Gross Domestic Product (GDP) (10 trillion won based on 2023), they are designated as mutual investment-restricted business groups (large business groups), and if they exceed 5 trillion won, they are classified as public disclosure target business groups (quasi-large business groups).
As of the end of last year, Kumho Asiana's total assets amounted to 17.39 trillion won, ranking it 28th in the business world, and it was included in the mutual investment-restricted business groups and public disclosure target business groups. However, after Korean Air became the largest shareholder of Asiana Airlines in December of last year, Asiana Airlines and seven other subsidiaries, including AIR BUSAN and AIR SEOUL, were removed from the group.
As a result, Kumho Asiana's total assets decreased to 3.43 trillion won, failing to meet the criteria for designation as a large business group and a quasi-large business group (7.28 trillion won and 3.5 trillion won, respectively), and thus it was excluded from the list.
Kumho Asiana applied for exclusion from the group at the beginning of this year, and the Fair Trade Commission officially made the decision to remove it the day before.
With the exclusion from the large business group, Kumho Asiana is expected to escape various regulations applicable to large business groups. Moreover, subsidiaries classified as small and medium-sized enterprises may receive policy support and tax benefits that they could not have obtained due to being affiliated with a large corporation.
Meanwhile, Hanjin Group, which acquired Asiana Airlines, rose in the business ranking from 14th to 12th.
Kumho Asiana Group grew from its founding in 1946 as Kumho Express and expanded significantly during the tenure of former Chairman Park Sam-koo through aggressive mergers and acquisitions (M&A). It reached 7th place in the business world at one time, having acquired Daewoo E&C for 6.4 trillion won in 2006 and Korean Air Logistics for 4.1 trillion won in 2008.
However, after the global financial crisis in 2008, the construction industry sharply declined, increasing the burden of debt and leading to a liquidity crisis. During this time, former Chairman Park Sam-koo experienced a management dispute with Park Chan-koo, chairman of Kumho Petrochemical. Ultimately, Kumho Asiana failed to rebuild and sold Asiana Airlines in 2019.