Gov’t, FTC clash over easing separation of industrial, financial capital

Fair Trade Commission (FTC) Chairman Ju Biung-ghi speaks during a press conference at Government Complex Sejong, Friday. Yonhap

A policy clash is deepening between the Fair Trade Commission (FTC) and the Lee Jae Myung administration over a potential easing of the controversial regulations on the separation of industrial and financial capital for major conglomerates to enable timely investment in artificial intelligence (AI).

The decades-old regulation blocks industrial conglomerates from owning a controlling stake in banks and other financial institutions. It was introduced in 1982 to strictly prevent big companies from making use of financial firms for improper sources of funding for their own businesses.

Calls to revisit the regulation have grown rapidly in recent weeks, especially after Lee and OpenAI CEO Sam Altman found common ground last month on the need to modernize Korea’s capital rules to support fast-growing sectors such as AI.

Samsung Electronics and SK hynix have to make enormous investments to meet soaring demand for their memory chips used in AI data centers. The local industrial sector argues that the regulatory hurdle makes it hard for them to source the capital quickly enough to stay competitive in the intensifying global AI race.

However, FTC Chairperson Ju Biung-ghi expressed skepticism about easing the rule, saying that the latest discussion seems to give preferential treatment to “certain companies,” which he called “inappropriate.”

“The principle of separating industrial and financial capital has remained in place for decades, so it is not proper for the FTC to consider its deregulation due largely to complaints from only a few companies,” Ju told reporters during a press conference Friday.

The easing of the rule can only be a “last card,” he said, so the government should consider other alternatives before moving to deregulate.

“When pushing for the deregulatory drive, we need to build a social consensus and take a more cautious approach,” Ju said. “The problem is that companies keep making complaints on regulations.”

Korea Chamber of Commerce and Industry Chairman Chey Tae-won speaks during a corporate growth forum in Seoul, Thursday. Yonhap

His latest position stands in stark contrast to that of the presidential office.

“President Lee underscored that we can discuss exceptions (to the regulation) in a very particular area,” presidential spokesperson Kang Yu-jung said last month.

Local civic groups are stepping up criticism of the government’s move to discuss loosening the rule, with some seeing it as giving preferential treatment to SK hynix in particular.

In response, Korea Chamber of Commerce and Industry Chairman Chey Tae-won, who also serves as the chairman of SK Group, rejected such claims. He said what the conglomerates want for the government is to provide policy support, so they can make timely investments in a key strategic area.

“My thought is that the government needs to come up with new policies, so companies can make major investments in the AI era,” Chey said during a corporate growth forum Thursday.

“We need an unprecedentedly huge scale of investment. Companies must find a breakthrough in this new type of game.”