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FTC to finalize penalty against Mirae Asset over intra-unit trading

(Mirae Asset Global Investments)
(Mirae Asset Global Investments)

South Korea’s antitrust watchdog is set to decide this month what sanctions to impose against conglomerates whose affiliates carried out illegal business transactions with each other, according to news reports Monday.

Under the fair trade law, internal trading among affiliates of large companies controlled by owner families is banned as chaebol scions have benefited from such practices at the expense of fair competition.

The list of companies subject to penalties by the Fair Trade Commission includes Mirae Asset Daewoo, one of the nation’s top investment firms, under Mirae Asset Financial Group. The affiliates of its holding firm allegedly engaged in illegal business activities to benefit Mirae Asset Chairman Park Hyeon-joo.

In November, the agency notified the investment firm that it would face correction orders and fines for illegal internal trading. But the FTC postponed meetings to decide on penalties due to the ongoing coronavirus outbreak.

Mirae Asset Daewoo joined the investment banking sector in November 2017, but it has not been allowed to issue promissory notes as the FTC started its investigation in December of that year.

If the commission files a legal complaint against Chairman Park accusing him of profiteering from the internal trading, Mirae Asset’s attempt to issue the notes may be delayed further.

Meanwhile, the FTC last month fined cosmetics manufacturer Amorepacific for offering deposit security to its affiliate Cosvision, which used it to borrow money to build new facilities.

The agency is also expected to hold meetings to discuss what penalties it will impose on other businesses that violated the internal trading regulations, including Harim, Kumho Asiana and SPC.

Having led the antitrust watchdog since September, 2019, FTC Chairperson Joh Sung-wook vowed in a media interview in July that she would spare no effort to address internal trading issues among big conglomerates here, which undermine fair competition in the market.

By Kim Young-won (