South Korea’s antitrust watchdog is set to decide this month on the level of sanctions against companies that carried out illegal business transactions between affiliates, according to news reports on May 11.
Under the fair trade law, internal trading among affiliates of large companies controlled by owner families is banned as such practices have been used for benefitting chaebol scions.
The list of companies subject to penalties by the Fair Trade Commission includes Mirae Asset Daewoo, one of the nation’s top investment firms, under Mirae Asset Financial Group. The company has engaged in business activities between the affiliates of its holding firm to allegedly benefit Mirae Asset Chairman Park Hyeon-joo.
(Mirae Asset Global Investments)
In November, the agency notified the investment firm that it would face correction orders and fines related to the illegal internal trading. But the FTC postponed meetings to decide punishment due to the ongoing coronavirus outbreak.
Mirae Asset Daewoo joined the investment banking sector in November, 2017, but it has not been allowed to run operations to issue promissory notes as the FTC started to begin its investigations regarding the investment firm’s illegal internal trading in December in the same year.
If the commission files a legal complaint against Chairman Park for profiteering from the internal trading, Mirae Asset’s attempt to run the note-issuing business can be further delayed.
Meanwhile, the FTC last month fined cosmetics manufacturer Amorepacific for offering deposit security to its affiliate Cosvision that borrowed money to build new facilities with the backing.
The agency is also expected to hold meetings to discuss penalties that it will impose on other businesses, including Harim, Kumho Asiana, and SPC, for violating the internal trading regulations.
Heading the antitrust watchdog, FTC Chairman Jho Sung-wook vowed in a media interview in July that she would spare no effort to address internal trading issues among big corporates here that undermine fair competition in the market.
By Kim Young-won (email@example.com)