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HOME > COMPANY INFO > HOLDING COMPANY |
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Holding Company Definition
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A holding company owns one or more other companies which are its subsidiaries.
The relationship between parent and subsidiary depends on majority control of the voting rights of shares or the ability to appoint
the majority of directors. Korea Computer Holdings, Inc. holds subsidiaries' shares and formulate group-wide business strategies;
actual operations will be carried out by affiliated firms.
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Holding Company Qualifications
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- Total assets must be over 100 billion won.
- Debt-equity ratio must be less than 200%.
- Financial guarantees for subsidiaries are not allowed.
- Book values of subsidiaries must be over 50% of total assets.
- Holdings of unlisted subsidiaries' shares must be over 50%.
- Holdings of listed and registered subsidiaries' shares must be over 20%.
- A regular holding company may not cross own financial and non-financial subsidiaries.
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Holding Company Advantages
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A holding company structure, which is used by many companies with multiple businesses,
creates a basic framework to facilitate organizational, operational, and strategic decision-making.
This structure can provide additional flexibility for financing so that subsidiaries can adopt to changes
in the respective industry which will allow them to serve their customers more effectively.
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