South Korea will abolish regulations this year that curb business groups from making indiscriminate investments, the country's vice finance minister said Friday.

The so-called “equity investment ceiling,” which has been in effect since 1987 and expires at the end of the year, bans 59 of the largest conglomerates with assets in excess of 2 trillion won (US$2.1 billion) from mutual investment and loan-guarantee limits. The measures also ban the country's largest 14 business groups with assets exceeding 6 trillion won (US$6.4 billion) from purchasing stakes in their affiliates or other firms in excess of 25% of their net worth.

“Political parties have demanded that such corporate red tape should be scrapped in order to boost corporate spending,” Vice Finance Minister Bahk Byong-won said during a radio interview. “Our stance also is that the regulations should be abolished.”

The Fair Trade Commission, the country's corporate watchdog, also said earlier it needs to change the regulations, but stressed that the rules are needed to prevent the country's conglomerates from making indiscriminate investments that could weaken their core businesses and hinder fair competition in the market. The business community has argued that the restrictions make it harder for them to enter new areas with high growth potential, claiming that the rules are unfair because they do not restrict foreign firms.