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Article 6
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The term "group enterprise" as used in the Rules refers to a group of corporate entities which, during the fiscal year in which the application for listing is filed and the most recent fiscal year, have a controlling or subordinate relationship with the applicant company.
Under any one of the following conditions, a controlling or subordinate relationship will be deemed to exist:
- The relationship is a parent-subsidiary one.
- The applicant company directly or indirectly controls personnel, financial, or business operations; or another company directly or indirectly controls the personnel, financial, or business operations of the applicant company. A relationship of "direct or indirect control of personnel, financial, or business operations" between two companies refers to any one of the following circumstances:
- Obtaining more than half of the director's positions in the other company.
- Having an appointee selected as general manager of the other company.
- Owning management rights to the other company under a joint venture agreement.
- Providing financing for the other company that equals or exceeds one-third of the total assets of the other company.
- Providing endorsement for a guarantee for the other company that equals or exceeds one-third of the total assets of the other company.
- The amount of cross-investment between the applicant company and another company reaches an amount equal to or greater than one-third of the total voting shares or capital of each company, and personnel, financial, or business operations of the other company can be directly or indirectly controlled.
Where any of the following circumstances exist, it will be deemed that there exists a subsidiary or controlling relationship between the applicant company and another company, provided that where the applicant company submits evidence proving that no controlling or subsidiary relationship exists, this restriction will not apply:
- More than half of the total number of directors, supervisors, and general managers for the applicant company and another company are the same. Calculation of this figure shall include the spouses, children, and relatives in the second degree of the aforementioned persons.
- More than half of the outstanding shares of voting stock or capital of the applicant company and another company are held by the same the shareholders or capital contributors.
- Another investing company and its related parties, using equity method of valuation with respect to the applicant company, hold more than one-half of the total outstanding shares of voting stock in the applicant company; or where the applicant company and its related parties, using equity method of evaluation, hold a total number of shares in another invested company exceeding one-half of the total number of outstanding shares of voting stock.
Calculation of the amount of stock held by or the amount of capital contributions to another company made by the applicant company shall include each of the following stock or capital amounts:
- The shares held by or capital contributions made to another company by the subsidiary of a company.
- Shares held by or capital contributions made by a third party for the applicant company.
- Shares held by or capital contributions made by a third party for a subsidiary company of the applicant company.
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