A Seoul court revoked the antitrust watchdog’s requests to suspend the business of Hanwha Systems and limit its rights to participate in public biddings, according to industry sources on Monday.

In a lawsuit Hanwha Systems filed against the Fair Trade Commission, the Seoul High Court decided to revoke the FTC’s business restrictions on Hanwha Systems, saying the FTC cannot punish the firm for the misconduct previously committed by a company it had acquired.

Hanwha Systems bought IT solutions company Hanwha S&C in August 2018. The FTC’s decision to punish Hanwha Systems is based on six cases of misconduct by Hanwha S&C between November 2014 and July 2017, during which Hanwha S&C was slapped with 11.75 demerit points for handing over contracts belatedly and delaying payments to subcontractors.

Of the six cases, two were related to construction. The FTC decided to punish Hanwha Systems because its current construction business originates from Hanwha S&C.

“Imposing demerit points is merely an internal action of the FTC to verify that corrective measures exist for illegal activities and the action itself doesn’t hold a binding force of law. The demerit points of Hanwha S&C can’t be passed on to Hanwha Systems,” the court said.

By Kim Byung-wook (kbw@heraldcorp.com)