In South Korea in the early 2000s, growth in the nation’s ten largest

Excellent question!

The Magoosh article is pointing out that there's no formal rule stipulating that a non-possessive pronoun can never refer to a possessive noun. It's not something that would be explicitly stated in a usage guide. However, if we think about why this usage makes answer choice (A) murkier than (D), we can see why you'd be unlikely to see that usage in a correct sentence on the GMAT.



Notice that "they" serves as the subject of a clause. Typically, when we get a pronoun as the subject of a clause, the most logical place to search for a referent is the subject of the previous clause. In this case, that subject was "companies' assets." That's not logical. Can we eventually double back and deduce that "they" should probably be referring to the companies themselves despite the fact that "companies'" is possessive? Sure. But it's confusing at first, and it requires some work to understand.

And here's (D) again:

Again, "they" is the subject of a clause, but this time the subject of the previous clause is "companies." Notice that this pronoun-referent connection is simply clearer and easier to understand than A. Put another way, you can make the argument that A doesn't technically violate any ironclad grammatical rule, but you can't make the argument that A is better than D.

It's a good reminder that SC isn't just about memorizing a bunch of grammatical rules; some rules can never be broken, while other "rules" aren't really rules at all, just general tendencies that we've derived from official GMAT questions over the years. Put another way, the reason we haven't seen a non-possessive pronoun referring to a possessive noun might not be because it's definitively wrong, but simply because every time such a construction shows up, there's a better, clearer alternative.

I hope that helps!