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Photo= Fair Trade Commission |
[Alpha Biz= Kim Jisun] The Korea Fair Trade Commission (KFTC) announced on January 5 the findings of its “2024 First Half Payment Terms for Subcontract Payments” report, revealing that Hankook & Company Group had the highest proportion of subcontract payments exceeding the legal payment period of 60 days. Most business groups, however, paid subcontractors within 30 days, half the legally mandated period. Only 8.5% of businesses operated dispute mediation mechanisms for subcontract issues.
The report analyzed 1,396 businesses across 88 conglomerates. Subcontract payment amounts during the first half of last year totaled KRW 87 trillion. Among conglomerates, Samsung led with KRW 12.3 trillion, followed by Hyundai Motor (KRW 11.4 trillion), HD Hyundai (KRW 6.2 trillion), and LG (KRW 4.9 trillion).
The cash payment ratio stood at 85.24%, while the combined cash and cash-equivalent payment ratio reached 98.19%. Twenty-seven conglomerates, including MDM, Krafton, BGF, and OK Financial Group, achieved a 100% cash payment ratio. The lowest cash payment ratios were observed in DN (8.48%), HiteJinro (22.60%), LS (32.29%), KG (37.3%), and Aekyung (44.21%).
The proportion of payments made within 30 days was 87.79%, similar to the previous year’s 87.64%. Payments exceeding 60 days accounted for just 0.14% of the total. Businesses that delay payments beyond 60 days are required to pay late interest.
Hankook & Company Group had the highest proportion of payments exceeding 60 days, at 12.88%, followed by E-Land (5.13%), Samchully (4.16%), Global Sae-A (3.83%), and Taeyoung (3.72%).
Only 120 businesses operated dispute mediation mechanisms, representing 8.5% of all businesses surveyed. By conglomerate, Samsung operated 14 mediation entities, Amorepacific 11, Hyundai Motor 10, while Hyundai Department Store operated none. Lotte managed 8 entities.
Additionally, the KFTC imposed fines ranging from KRW 250,000 to KRW 800,000 on 12 businesses, including Kakao affiliate Creation Music Rights and Samsung affiliate STM, for delayed disclosures.
Alphabiz Reporter Kim Jisun(stockmk2020@alphabiz.co.kr)
