Published : 2014-01-05 15:46
Updated : 2014-01-05 15:46
Nearly 87 percent of fines levied on conglomerates by the financial regulator were later canceled by the courts last year despite initial rulings that sided with the regulator, records showed Sunday.
The Fair Trade Commission (FTC)'s records showed it has won 14 of the 21 lower court cases on corporate fines last year, a success rate in the upper 60 percent. The results are better, at over 80 percent, when smaller companies and individuals are also considered, according to the FTC.
"The FTC fines amounted to 4 trillion won (US$3.79 billion) over the past 30 years, and 3 trillion won was levied after 2005," an FTC official said.
But court records showed that 86.9 percent of the ordered fines were later found to have been canceled in the appeals process. Of the 313.1 billion won of fines in 21 cases won by the FTC, some
272.1 billion won was dropped for seven firms, according to the records. For instance, local refiners penalized up to 135.6 billion won for collusion had their fines canceled by the courts.
Insurance firms that initially were told to pay up to 4.3 billion won were also exempted in later court rulings. Appeals against the FTC are handled by the Seoul high courts and Supreme Court.
Firms are also paid back retroactively for interest on the fines remitted before they are canceled in the appeals court rulings.
Some blame the FTC for premature punitive verdicts against the corporate community prompted by calls for "economic democratization," a campaign to mainly end abuses by large conglomerates using their market dominance.
"The FTC should have been precise in applying its tools to carve out exactly what was needed but wasn't able to," a senior judge said. "I think the situation worsened because of the prevalent mood for economic democratization." (Yonhap News)