Using a circular cross-holding ownership structure, many business groups in Korea exert full control over all group-affiliated companies despite holding a relatively small portion of cash flow ownership. The Korean government thinks that this divergence between ownership and control may result in undesirable sede-effects such as economic dominance by large business groups or decelerate corporate innovation. As a result, the Korean government limits large group-affilated companies' equity investments in other companies by restricting a large company's investment in other companies' equity to a maximum of 40% of asset value. At the same time, the government encourages large business groups to convert to a holding company structure, which would eventually put an end to their circuitous ownership structure. We have witnessed a growing trend of conversions to the holding company structure since 2006. This case study describes the conversion process of the SK group, which ranks fourth in asset value in Korea, into a holding company structure. With its conversion, SK group is poised to promote independence in business among group-affiliated companies and to promte profit-oriented business strategies. Positive effects of the conversion to a holding company include : (a) ability to avoid an unfair wealth transfer from a distressed affiliate to other affiliates within the same business group, (b) enhancing transparency within the group, and (c) opportunities to pursue financial flexibility in executing M&A activities. There are also some negative aspects such as : (a) the need for significant amounts of fresh capital to secure additioinal equity positions of subsidiary firms as stipulate by the law, and (b) the troup has to reluctantly sell its financial subsidiaries because a general holding company cannot have any financial subsidiaries. Since holding companies in Korea can fully control subsidiaries with only 20% to 40% of cash flow ownership, there are mounting concerns about possible economic concentration in large business groups in Korea.