Government Tightens COVID-19 Response... Plan to Announce General Holding Company CVC Ownership Measures in July

Government Aims for 'Second Venture Investment Boom' by Easing CVC Regulations
National Assembly Also Successively Proposes 'Fair Trade Act Amendments'

Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance, is delivering opening remarks at the '6th Emergency Economic Central Countermeasures Headquarters Meeting' held at the Government Seoul Office in Jongno-gu, Seoul on the 11th. Photo by Kang Jin-hyung aymsdream@

[Asia Economy Reporter Jang Sehee] The government plans to announce in July a plan to allow general holding companies to hold corporate venture capital (CVC) in a limited capacity to improve regulations on CVCs.

According to the Ministry of Economy and Finance on the 13th, the government is reportedly preparing measures related to the limited holding of CVCs by general holding companies that do not undermine the principle of separation between finance and industry, while aiming to achieve investment effects. The intention is to attract funds from large corporations to venture companies and lead a venture investment boom.

Current law prohibits general holding companies from acquiring shares of domestic companies engaged in financial or insurance businesses. As a result, large corporations have found it difficult to invest in venture companies or startups through CVCs.

Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance, stated at the 6th Emergency Economic Central Countermeasures Headquarters meeting held at the government Seoul office on the 11th, "To strengthen the venture ecosystem through expanded venture investment, we will prepare and announce a plan for the limited holding of CVCs by general holding companies within July."

Kim Yong-beom, 1st Vice Minister of the Ministry of Economy and Finance, also said, "We will review various measures such as the ratio of subsidiaries, the scope of CVC operations, and whether to include private capital when forming CVC funds."

In fact, bills allowing holding companies to own CVCs are actively being proposed in the National Assembly. Democratic Party lawmakers Kim Byung-wook and Lee Won-wook have jointly proposed an amendment to the Monopoly Regulation and Fair Trade Act (Fair Trade Act).

Lawmaker Kim emphasized, "CVC diversifies investment channels into venture and startup companies with technological capabilities, moving away from the perspective of economic power concentration." Lawmaker Lee also stated, "The issue of allowing CVCs should be approached not only from the perspective of separation between finance and industry but also from the perspective of activating investment and fostering the venture ecosystem."

This content was produced with the assistance of AI translation services.