South Korea’s POSCO Chemical Co. has received an order from the Korea Fair Trade Commission (FTC) to undo its former practice of terminating a deal with a partner company without prior notice.

The FTC on Monday issued a corrective order to POSCO Chemical for violating the Fair Trade Act for replacing its orders at Segang Industrial Co. worth 48.43 million ($37,533) with another company with a sufficient heads-up.

Segang Industrial in August 2017 was consigned to weld pipes at the POSCO Gwangyang steel plant. But the contract was cut off in July 2019 with six months still left in the contract without prior notice.

Since 95 percent of its revenue came from POSCO Chemical, Segang claimed to have suffered massive losses.

“We hope that this will serve as a warning to other large companies in Korea against unilaterally ending contracts without prior notice or discussion,” said the FTC.

POSCO Chemical however claimed it had discussed the matter with Segang Industrial. It will review the finding from FTC for further action, the company said.

Shares of POSCO Chemical closed down 0.79 percent at 125,500 won on Monday afternoon.

By Susan Lee

[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]