SEOUL, December 31 (AJP) - South Korea’s antitrust watchdog said on Wednesday it had uncovered four cases of unfair internal transactions involving large business groups this year, imposing a combined 93.5 billion won ($70 million) in fines and referring three companies to the prosecution.
Corrective orders and fines were issued against Daebang Construction, Jungheung Construction, Woomi Construction and CJ Group, while the three builders were reported to prosecutors, according to the Fair Trade Commission.
The commission said it identified violations of the Monopoly Regulation and Fair Trade Act, including unfair support among affiliates and the provision of undue benefits to them.
Woomi Construction received the largest penalty, 48.3 billion won, followed by Daebang Construction with 20.5 billion won, Jungheung Construction with 18 billion won, and CJ Group with 6.5 billion won.
In Woomi’s case, the company, while acting as the main developer on several apartment projects, selected five affiliates with limited construction experience as non-lead contractors and allocated them substantial work volumes. The practice was found to have significantly undermined fair competition in the housing construction market.
Daebang Construction and two subsidiaries were found to have resold large parcels of public housing land they had been allocated to another affiliate, Daebang Industrial Development, and its five subsidiaries, effectively transferring development project rights within the group.
Jungheung Construction was penalized for providing credit guarantees to support funding for housing and industrial projects run by family-controlled affiliates. The commission said the support enabled those affiliates to raise funds, including through asset-backed and other securitized loans.
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