Note 2-45

(45) Under the Commercial Code, a parent company is a company that holds a majority of voting shares issued by a subsidiary. Under the Securities and Exchange Law, however, a parent company is a company that controls a subsidiary's decision-making body. In this respect, a nominal standard for a parent is the ownership of a majority of a subsidiary's voting rights (the shareholding standard is equal to this nominal standard). Under an effective standard, a company that holds 40% to 50% of a subsidiary's voting rights is interpreted as a parent if the company has close relations with the subsidiary and can control decisions at the subsidiary in cooperation with partners or has sent its directors to account for a majority of the board members at the subsidiary.