The Korea Times has report that Chairman Dong-Soo KIM of the the Fair Trade Commission of Korea will strengthen its monitoring of Korea’s main conglomerates. We suspect that increased monitoring of major foreign-capital invested enterprises will, also, be the target of the increased monitoring. We strongly advise to have an attorney conduct a complete compliance audit immediately.
The Korea Times reported, in part, that:
Kim Dong-soo, chairman of the Fair Trade Commission (FTC), said Wednesday that the FTC will disclose fact sheets demonstrating dozens of conglomerates’ stock ownership, liabilities and inter-subsidy dealings by August.
Kim said 51 conglomerates banned from doing cross-investment among affiliates will be subject to the announcement which he said is to “strengthen the FTC’s monitoring to secure more transparent corporate management.”
Information regarding stock ownerships of 51 firms will be announced in June, with one regarding liabilities in July and inter-subsidy dealings in August, he said.
“We need to have a stronger monitoring system on conglomerates to make their management more transparent,” Kim told reporters at a Seoul hotel where he spoke at a forum. “We will tell what big companies in phases to those involved in their business.”
Kim Hyung-bae, FTC spokesman, said as of late April, 63 conglomerates were banned from doing cross-investment among affiliates, but the FTC will focus on 51, excluding 12 state-funded firms.
Kim’s remarks came only one week after the Commission on Shared Growth for Large and Small Companies (CSG) announced a list of best and worst companies in terms of business attitude toward domestic suppliers and subcontractors.
Six companies, including Hyundai Motor, Kia Motors, Samsung Electronics and POSCO, got the highest scores in the CSG’s assessment, while seven firms, including LG Uplus, Hyundai Mipo Dockyard, STX Offshore, were categorized as “underachievers.”
The FTC and the CSG are key entities playing a pivotal role in pushing forward President Lee’s co-prosperity policy. Kim said the FTC will look into all inter-subsidy dealings, each worth 5 billion won ($4.29 million) or more, to check whether they were done in a fair and transparent manner.
“We will continue to provide detailed information about this (inter-subsidy dealings), enabling small firms to know their counterparts’ business practices,” he said.
Asked about the FTC’s alleged pressure on large retailers to open new sections that exclusively sell products from small and medium-sized manufacturers, he said “this is a matter that should be resolved voluntarily between retailers and small manufacturers.”
The alleged intervention, surfaced last week through news reports, stirred controversy and provoked retail giants. Critics say the anti-trust regulator is abusing its power and the scheme will run counter to free-market principle, of which the FTC exists to uphold.
The complete article by the Korea Times may be found at: FTC to Tighten Chaebol Monitoring.
Additional articles on the Korean Fair Trade Commission and Korea’s Monopoly Control Measures may be found at:
- Four Oil Companies in Korea Fined for Price Fixing
- The FTC of Korea: All Bark and No Bite?
- Defining the Relevant Market in Korea by the KFTC
- Korea’s Antitrust Evolution in Korea. Sean Hayes in Korea Times
- Antitrust/Competition Law Consent Orders in Korea
- Fines by Korea Fair Trade Commission Increase for Abuse of Market Dominant Position and Unfair Trade Practices in Korea
Sean Hayes, IPG’s Co-Chair of the Korea Practice Team, may be contacted at: SeanHayes@ipglegal.com
- Philips Fined by Korea Fair Trade Commission for Price Fixing
- Abuse of Superior Bargaining Power Notification by the Korea Fair Trade Commission: Distributor Risks in Korea
- Abuse of Market Dominance in Korea: Competition Law in Korea
- Korea-China to Expedite Free Trade Talks
- Korea’s National Trade Commission Awards Damages to Local Company for Damages from Korea-EU FTA
- Bye Bye Uber in Korea?