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SK chief faces punishment over 2017 LG Siltron acquisition

SK Group Chairman Chey Tae-won (Yonhap)
SK Group Chairman Chey Tae-won (Yonhap)

South Korea’s antitrust watchdog will embark on a process of punitive action against SK Group and its chairman Chey Tae-won over an accusation that he plundered corporate profits during the group’s 2017 buyout of silicon wafer manufacturing firm LG Siltron, now SK Siltron.

According to industry sources on Friday, the Fair Trade Commission here is expected to inform SK Group of findings on its investigation into the SK Group’s possible irregularities during the purchase of the silicon wafer company.

When SK Group receives the antitrust watchdog’s investigation results, it has to report back to the commission with its opinions within four weeks.

The FTC will then hold a nine-member meeting later this year to decide whether to take punitive action against SK Group and its chairman.

The FTC could potentially hand over the case to the law enforcement authority.

In January 2017, SK Holdings, the group’s holding firm, purchased a 51 percent stake in the silicon wafers manufacturing firm of LG Group for 18,000 won per share.

When SK Holdings bought the remaining 49 percent stake in LG Siltron, Chey Tae-won picked up a 29.4 percent stake in LG Siltron for 12,871 won per share.

In November of the same year, local civic group Solidarity for Economic Reform asked the FTC to investigate SK Group, alleging that the group allowed Chey to benefit from the buyout.

The FTC has investigated the case since 2018.

It reportedly suspects SK Group favored Chey by giving away its opportunity to purchase the remaining stocks for less than it previously paid.

Meanwhile, SK Group has denied the allegation, saying that there was nothing illegal about its chairman’s bid for LG Siltron. The group added that Chey took part in the bid as some overseas investors had moved to buy the stake in the wafer manufacturing company.

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