The Financial Supervisory Service (FSS) announced on August 25 that it held a regulatory committee meeting on August 14 and issued a disciplinary warning to Heungkuk Securities and Heungkuk Asset Management, two of the subsidiaries of the Taekwang Group.
According to the FSS, the two subsidiaries bought country club memberships for corporate customers, country club vouchers, brochures, and so on from 2010 to last year from Tsis, a subsidiary owned by former Taekwang Group Chairman Lee Ho-jin and his family members, while paying Tsis billions of won.
Earlier, similar intra-group transactions between Tsis and the other subsidiaries including Taekwang Industrial, Tbroad, Heungkuk Life Insurance and Heungkuk Fire & Marine Insurance caused a controversy as well. In one of those transactions, kimchi was sold for 195,000 won per 10 kg, an unreasonably high price, as gifts for executives and employees. The FSS told Heungkuk Life Insurance last year to strengthen its control of intra-group transactions.
“We have looked into intra-group transactions involving Heungkuk Securities, Heungkuk Asset Management, Heungkuk Life Insurance and Heungkuk Fire & Marine Insurance since a petition was submitted by a civic organization last year,” the FSS explained, adding, “Investigations are still underway when it comes to the insurance companies.”