South Korea’s top conglomerate Samsung Group which has been under all-around scrutiny since liberal President Moon Jae-in took office last year from bookkeeping to union management has received fresh visits from the antitrust agency on the possibility of keeping business deals unfairly within the group to benefit the owner family.
The Fair Trade Commission (FTC) handpicked Samsung Electronics’ headquarters in Suwon, Gyeonggi Province, the group’s holding entity Samsung C&T, catering service provider Samsung Welstroy and Samwoo Architects & Engineers for on-site investigation for any traces of illicit or unfairly excessive business concentration within the group family.
The antitrust agency under outspoken chaebol critic-turned chief Kim Sang-jo has been investigating family-run chaebol majors for tunneling practices by assigning work to units where the owner family members have large stake in, pointing as one of ills that must be rooted out to ensure evener playing field in commerce.
Samsung Welstory and Samwoo Architects & Engineers, which fall under the umbrella of Samsung C&T where Jay Y. Lee is seated as top shareholder, generate revenue largely from orders from Samsung names, according to FTC’s findings on top chaebols’ internal trade based on the 2014 regulation.
The rule limits business groups’ intra-group transactions among affiliates in which owner families hold over a 20 percent stake for listed firms and 30 percent for unlisted firms. The FTC found that the companies cut down internal transactions briefly after the regulation adopted, but the transactions increased again in the following year.
By Hwang Hyung-gyu and Choi Mira
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