SOUTH KOREA’S antitrust watchdog has proposed new rules for family-run conglomerates to make it harder for such businesses to muscle through their agendas at the expense of minority shareholders.

The proposed amendments to existing regulations would require a newly created holding company to own at least 30 percent in an entity it wants to treat as a listed subsidiary and at least 50 percent for an unlisted unit, according to a Fair Trade Commission (FTC) draft. The current minimums are 20 percent for listed and 40 percent for unlisted.

The steps to raise the cost for a family-run conglomerate to control subsidiaries are expected to be proposed to the National Assembly in November and are in line with campaign promises made by President Moon Jae-in to reform chaebol. The draft amendments to the Monopoly Regulations and Fair Trade Act, first enacted in 1980, reflect changes in the country’s economic environment, the regulator said in a statement.

“Conglomerates will find it harder to make changes like mergers or spinoffs among affiliates without support from the market and shareholders,” FTC Chairman Kim Sang-jo said.

Kim was appointed by a president who himself won office amid a wave of popular support for stemming chaebol power.

The government faces a challenge in reforming conglomerates in ways that could be painful for the sprawling business groups because it must rely on them to promote economic growth. Moon has referred to chaebol titans as a “deep rooted evil,” but has yet to substantially change the rules they operate under.

“I would give 20 points out of 100, a basic score, to what the Moon government has done for corporate governance reform,” said Bruce Lee, CEO at Zebra Investment Management. “Chaebol would stop doing bad things, but that’s not enough for an improvement.” (SD-Agencies)