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Photo = Fair Trade Commission |
[Alpha Biz= Paul Lee] Hyosung Heavy Industries has been sanctioned by the Fair Trade Commission (FTC) for requiring a subcontractor to pay construction costs that should have been paid by Hyosung.
On the 18th, the FTC issued a corrective order to Hyosung Heavy Industries for violating the Subcontracting Law. In 2021 and 2022, Hyosung instructed its suppliers verbally to have subcontractors pay a total of 38.5 million won in construction costs, which Hyosung was legally obligated to pay.
As a result, the subcontractors made payments they were not legally or contractually required to make.
The FTC determined that Hyosung's actions, instructing the subcontractors to pay the costs without justifiable reasons, constituted unfair conduct by seeking economic benefits without a valid cause.
Hyosung argued that the subcontractors were responsible for certain tasks that were not completed, and thus, it was reasonable for them to bear the cost. The company also claimed that the subcontractors were asked to pay the costs instead of receiving the excess construction payments, and that this was a legitimate reason.
However, the FTC rejected Hyosung's defense. The subcontractors had been performing the work as agreed, and there was no objective evidence to support Hyosung's claim that excess payments had been made. Furthermore, the FTC concluded that the demand for payment was not made through legal procedures and thus could not be considered justifiable.
Following the ruling, Hyosung Heavy Industries reportedly reimbursed the subcontractors for the paid amounts and any interest on the delay.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
