The Fair Trade Commission has entered into sanctions procedures for unfair internal transactions by the Samsung Group. The photo shows Fair Trade Commissioner Sung-wook Cho, speaking at a win-win agreement for distribution and supply industry held at the Small and Medium Business Administration in Yeouido, Seoul on the afternoon of the 2nd. yunhap news
The Fair Trade Commission has entered into sanctions procedures for unfair internal transactions by the Samsung Group. It is alleged that Samsung affiliates unfairly supported Samsung Welstory through internal transactions.
According to the FTC and industry on the 2nd, the FTC recently sent an examination report (prosecutor’s complaint) to Samsung affiliates such as Samsung Welstory. The review report contained the alleged violations of the’Monopoly Regulation and Fair Trade Act (Fair Trade Act)’ of Samsung affiliates and opinions of the examiners’ actions.
Companies that have received the FTC’s review report submit their opinions within 4 weeks, after which the FTC holds a plenary meeting (corresponding to the court’s trial) to determine the level of sanctions, etc. The FTC’s Corporate Group Bureau has been investigating the allegations that Samsung affiliates have systematically supported Samsung Welstory since July 2018.
Samsung Welstory, which runs the catering and food distribution business, is a subsidiary of Samsung C&T, whose total family is the largest shareholder, including Samsung Electronics Vice Chairman Lee Jae-yong, and raised 38.3% of its sales in 2019 to affiliates. The FTC believes that Samsung affiliates have made economic gains by trading with Samsung Welstory on conditions that are more favorable than the normal price (market price).
Earlier, the FTC announced this year’s business plan, saying, “We will correct unfair internal transactions, focusing on industries that are closely related to people’s life, such as food service and alcohol.” Because of this, it was interpreted that sanctions on Samsung Welstory were imminent. An official from the Fair Trade Commission said, “The specific level of sanctions contained in the review report cannot be disclosed, and the final decision, such as whether to file a prosecution or not, and fines, will be made at the plenary meeting.”
Sejong = Reporter Seongbin Lim [email protected]