A sign of Hyundai is pictured at its booth during the Beijing International Automotive Exhibition, or Auto China 2024, in Beijing, China, April 25. Reuters-Yonhap

The Cabinet on Tuesday approved a revision to the rule on the designation of large business groups and their chiefs for a watch list subject to stricter filing and other antitrust regulations, the regulator said.

Under current law, conglomerates with total assets exceeding 5 trillion won ($3.68 billion) are designated as "large corporations" subject to tighter disclosure rules and other rules.

Individuals and their family members also come under strict rules and scrutiny of personal financial deals after being designated as company heads.

But the government revised the enforcement ordinance of the monopoly regulations and fair trade law, specifying four exceptional conditions regarding the designation of chaebol chiefs.

Exceptions are allowed when a chief who practically controls a conglomerate does not invest in its domestic affiliates and is not involved in any form of cross-shareholding, his or her family members are not involved in management, and a chief and his or her family members do not have obligation guarantees and other liability issues with domestic affiliates.

In such exceptional cases, a corporate body itself is regarded as a chief and owners can avoid policy regulations.

The revision will come into force immediately following presidential approval.

There have been calls for the revision of decades-old law in accordance with changes in social and economic circumstances, particularly as a growing number of Korean firms have leaders with foreign nationality.

E-commerce giant Coupang, for example, has been on the government's watch list since 2021, but its founder CEO Kim Bom-suk has not been named as its leader as he is a Korean American. The case has sparked criticism that the regulation would discriminate against Korean entrepreneurs.

"The revision is expected to improve fairness and predictability of the large conglomerate designation. We will soon announce the watch list for this year based on the new regulation," an FTC official said. (Yonhap)