South Korea’s antitrust watchdog is likely to press a charge against Mirae Asset Financial Group over allegations that the controlling family of the financial empire has been illegally benefitted from suspicious intra-trading deals, the authorities confirmed on Wednesday.
Ending a two-year investigation, the Fair Trade Commission said it has recently sent a review report to the group, stating that Chairman Park Hyeon-joo and his family made financial gains through Mirae Asset Consulting, a de facto holding company in which the members of the controlling family hold a combined 91.8 percent stake. Affiliates of the group have created real estate funds so that profits generated from their businesses, including Four Seasons Hotel Seoul, a five-star hotel, and Blue Mountain Country Club, a prestigious golf club in Gangwon Province, flow into the holding company.
The FTC is set to hold an internal meeting as late as early next year to decide on whether to impose penalties and report the chairman and the firm to prosecutors.
Four Seasons Hotel Seoul was funded with 500 billion won ($427 million) of private equity entirely raised by Mirae Asset affiliates including Mirae Asset Life Insurance. Mirae Asset Consulting, operator of the hotel, is entitled for financial gain from rent fees. The FTC has been looking into suspicions that the profit-taking structure has been drafted in advantage of the controlling family’s interests from the beginning.
According to the FTC, Park has a 48.6 percent stake and his family has a 43.2 percent stake of Mirae Asset Consulting. The consulting firm controls the group’s parent company Mirae Asset Asset Management, with a 32.9 percent stake and a 9.9 percent stake at Mirae Asset Capital.
Under the Fair Trade Act, companies with assets of more than 5 trillion won and in which the controlling family has more than 20 percent of the total stake can be subject to sanctions for unfair intra-trading deals. A company or individual can be imposed with a penalty of two to five percent of related sales if they are found to violate the act.
By Shin Ji-hye (email@example.com)