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20 conglomerates face fines for abuse of suppliers, contractors

About 20 large businesses will face hefty fines for mistreating their suppliers over the next six months, Fair Trade Commission Chairman Kim Dong-soo said.

The antitrust regulator has been conducting an extensive inquiry into 40 large companies since last year. In a media interview, he said about half of them were found to have been involved in wrongdoings including unfair pricing and arbitrary cancellation of orders.

The probe was launched in September amid growing criticism that big companies reap profits from smaller businesses and do not share the benefits of the economic recovery with the wider society.

President Lee Myung-bak has been spearheading the campaign for shared growth between large and small businesses and urged regulators to forge a better business environment for smaller suppliers.

“About half of the 40 businesses were involved in business malpractices harming their subcontractors,” Kim said. “We plan to take stern corrective measures including heavy penalties within the first half.”

Kim said there was also evidence of illegal inter-subsidiary dealings, which often involves kickbacks to secure or increase contracts.

He also said he would meet with chief executives of 15 local conglomerates soon to discuss how to promote a mutually beneficial relationship between large and small firms.

By Cynthia J. Kim (cynthiak@heraldcorp.com)
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