[단독] SPC hit by penalty bomb, counterattacked by administrative lawsuit against FTC

Input 2021.02.16 11:13

檢, Chairman Heo Young-in cannot be summoned
It seems to be watching the results of the administrative litigation

SPC Group, which includes Paris Baguette, Dunkin’ Donuts, and Samlip, filed an administrative lawsuit against the Fair Trade Commission. The FTC said that the SPC Group improperly supported SPC Samlip (Samlip), a company controlled by the head family, imposed a penalty last year and took criminal charges, but the prosecution’s investigation of the SPC Group has been sluggish.

According to the FTC and the legal community on the 16th, the SPC Group recently filed an administrative lawsuit against the FTC. The administrative litigation has just been filed, and the first due date has not yet been set.

The SPC Group is expected to actively disclose that there is a problem with the FTC’s actions through administrative litigation. The problem with the FTC is that SPC Group unfairly collected tolls against affiliates to help chairman Huh Young-in’s two sons succeed in management.

In fact, the SPC Group is a structure in which Paris Croissant, a holding company, owns an affiliate. Chairman Huh’s two sons have a 32.9% stake in Paris Croissant, an unlisted company, and a 22.9% stake in Samlip, a listed company in the group. The FTC argues that Chairman Huh’s sons tried to increase the value of Samlip’s stake in order to expand their stake in Paris Croissant.

To this end, affiliates such as Mildawon, Egg Farm, and Grexwein paid a toll to Samlip in the process of supplying raw materials. The FTC explained that the average of 9% of the product supply price was paid as tolls, exceeding 210 raw materials. It is also a problem that Shani’s brand and sales network have been handed over to Samlip.

On the other hand, SPC Group is in a position that it is difficult to accept the opinion of the FTC. It is explained that it is normal for Samlip to take over this role and receive a certain price because there are no logistics, R&D, and sales organizations such as Mildawon. On the acquisition of Shani, he was once found free of charge in prosecution investigations.

The FTC’s claim that it did this to help Chairman Huh’s sons succeed in management is also speculation. Since Paris Croissant owns a 40% stake in Samlip, the value of its stake in Paris Croissant increases as Samlip’s share price rises. The rise in Samlip’s stock price does not mean that the second generation can increase their stake in Paris Croissant.

The legal community believes that there is no small possibility that the SPC Group will win in administrative litigation. The Fair Trade Commission imposed a penalty of 64.7 billion won on the SPC Group, which was the largest in history among the penalties for unfair internal transactions. When the sanctions were announced in July of last year, it was noisy, but after the facts of the specific charges were revealed, it was said that the FTC was unreasonable.

The prosecution, who took over the case from the FTC, is also “adjusting speed”. In September of last year, immediately after taking over the case, the prosecution requested a warrant for seizure and search against the SPC group, but was dismissed by the court. For nearly half a year since then, the prosecution’s investigation has not made much progress. An official at the prosecution said, “We are in the process of confirming necessary data and investigating related persons,” but the investigation was conducted until the end of last year, and the summons of Chairman Heo, the most important thing, has not been made.

An official from the legal profession said, “I reviewed the data from the FTC, but the allegations are not easy, so it is said that the investigation team has a lot of trouble.”

In this situation, when the SPC Group filed an administrative lawsuit, there were reactions from the inside of the prosecution that it went well. The theory of speed control came out to observe the results of administrative litigation and proceed with the investigation. Another variable is the imminent personnel of the prosecution’s middle officials. Min-hyung Kim, head of the Fair Trade Investigation Department of the Seoul Central District Prosecutors’ Office, who is in charge of the case, is likely to be replaced by this personnel after filling the first year of transfer. When a new supervisory prosecutor arrives, a considerable amount of time is required for reconsideration.

Samlip’s sales last year increased by 1.7% year-on-year to KRW 2.542.7 trillion, but it turned into a deficit in the aftermath of the penalty. Of the penalties imposed by the Fair Trade Commission, 29.1 billion won was reflected in the performance, recording a net loss of 12,379.93 million won last year.

If the SPC Group wins in an administrative lawsuit in the future, the penalty imposed can be returned. Of the 3,1980 billion fines imposed on companies by the Fair Trade Commission from 2015 to 2019, the fines returned by companies through lawsuits amounted to 1,153 trillion won. The prosecution rate for cases filed by the FTC dropped from 70% in 2016 to 31% in 2019.