The government is expected to announce as early as this week a plan to ease the separation of industrial and financial capital, according to reports on the 10th. The main point is to allow corporations with a holding company structure to establish a great-grandchild company engaging in finance if they demonstrate "business feasibility" and "insufficient funding." To that end, measures such as "easing the requirement that a grandchild company hold 100%→50% equity in a great-grandchild company" and "allowing the Public Growth Fund to invest in all or part of the remaining 50%" are expected to be introduced. If so, for example, SK Group could create a financial lease company and use it to make large-scale investments in SK hynix's artificial intelligence (AI) business.
However, the government decided to ease the separation only for holding companies of corporations in advanced strategic industries such as semiconductors. It was also reported to have set a policy that if a holding company wants to create a great-grandchild company engaging in financial lease operations, it must undergo a review by the Fair Trade Commission. The Korea Fair Trade Commission (FTC) plans to consider the feasibility of the business plan for the financial lease operation during its review. It also plans to examine whether the company's current equity capital makes it difficult to invest in advanced strategic industries.
Industry watchers say SK Group is expected to benefit the most from this measure. SK Group's holding company SK controls SK Square, and SK Square is the largest shareholder of SK hynix. In other words, SK hynix is a grandchild company of the holding company. Under current law, SK hynix can establish only wholly owned subsidiaries. SK has said that due to this regulation, it is difficult to attract large-scale outside investment when internal funding is insufficient.
With this regulatory easing, SK hynix will be able to hold only 50% equity and attract external investment to establish a joint venture engaging in financial lease operations. An industry official said, "A great-grandchild company created by SK is highly likely to build a plant for SK hynix and lease that plant to SK hynix."
Furthermore, the government plans to require that when a holding company raises external investment, it must include funds from the Public Growth Fund. The Public Growth Fund is a core financial policy of the Lee Jae-myung administration to foster future growth engines by investing more than 150 trillion won in advanced strategic industries. The Public Growth Fund's equity contribution ratio to a great-grandchild company will be up to 50%, and will vary by each holding company's project.