Omits Disguised Subsidiaries from Documents Submitted to FTC
The Fair Trade Commission said on Feb. 8 that it has requested the prosecution to investigate KCC Group chairman Chung Mong-jin for intentionally omitting 10 companies and 23 relatives from the documents submitted to the FTC for designation of big business groups for 2016 and 2017.
The Fair Trade Commission requires big business groups to submit data regarding their affiliates, shareholders of the affiliates, non-profit corporations, the relatives of the group chairmen, executives, and audit reports every year.
KCC chairman Chung is suspected of having omittied 10 companies, including Sylvaton Acoustics, which is wholly owned by him under a borrowed name, and Dongju, which is owned by his relatives. Chung's 23 relatives, including his uncles and brothers-in-law, were also omitted from the documents.
By omitting these data, Chung prevented watchdog organizations and civic groups from confirming the existence of affiliates not officially included in KCC Group and made KCC Group exempted from regulations applied to large business groups. In the end, KCC Group was excluded from the list of business groups subject to the government’s cross-shareholding regulations from September 2016 to April 2017.