(ATTN: RECASTS throughout with more details and SK statement)
SEOUL, Dec. 22 (Yonhap) – The South Korean competition regulator on Wednesday announced that it has decided to impose a combined fine of SK Inc. and group leader Chey Tae-1.6 billion won (1.3 million won). dollars) for allegations that the company allowed it to be improperly pocketed. profits related to its 2017 buyback operation.
At the end of a three-year investigation, the Fair Trade Commission (FTC) took punitive action against SK Inc., the SK Group’s holding company, and Chey over allegations that the company deliberately aided him. to realize huge profits in the process of its purchase from LG. Siltron Co., an insert maker which was later renamed SK Siltron Co.
Even though the regulator determined that the acts were illegal, it did not file a complaint with the prosecution on the matter.
In January 2017, SK, formerly SK Holdings Co., purchased a 51% stake in LG Siltron from the LG Group for 18,138 won per share. He bought another 19.6% stake in LG Siltron for 12,871 won per share in April of the same year.
The FTC ruled that SK had “directly and indirectly” allowed Chey to acquire a 29.4% stake in LG Siltron from the creditor banks in August 2017. The company could have bought the remaining stake for about 30% less. because the participation had no management bonus. .
The regulator said the stake in question could have been a lucrative business opportunity for SK, but the company’s concession allowed Chey to reap “unwarranted” profits.
Under the Fair Trade Law, large trading groups with assets exceeding 5,000 billion won are prohibited from giving undue profits to their bosses by offering lucrative business opportunities.
The commission said that Chey would have reaped nearly 200 billion won in profits, when the value of the stake’s share is calculated.
The commission decided to impose an interim fine of 800 million won on SK and Chey each. He also ordered them not to repeat similar actions in the future, but that did not mean that Chey had to sell the 29.4% stake in SK Siltron.
This was the first antitrust decision taken against a controlling stakeholder abuse of a subsidiary’s business opportunities.
SK said the FTC’s decision was difficult to accept.
“It is unfortunate that the FTC has pronounced punitive measures and we find this difficult to accept, even though we have fully explained our position,” SK said in a statement.
SK said he plans to take the necessary action after deliberation. Market watchers predict that SK could appeal to court.
The FTC decision came a week after Chey made a rare appearance during an FTC deliberations on the case.