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Harim Group Chairman Kim Hong-kuk (left) and his son Kim Jun-young. (Photo: Yonhap News Agency) |
[Alpha Biz= Kim Jisun] Amid an ongoing lawsuit by Harim challenging fines imposed by Korea Fair Trade Commission over alleged chicken price-fixing, attention is also focusing on its affiliate Allpum, which was likewise penalized in the case.
Allpum is a chicken processing and distribution company fully owned by Kim Jun-young, the son of Kim Hong-kuk.
Harim and related affiliates were fined 94.2 billion won for collusion in the broiler chicken market and 13 billion won for alleged collusion involving chickens used for samgyetang. The companies have challenged the penalties and have been fighting the case in the Seoul High Court for several years.
Separately, the Harim Group was also penalized in 2021 for allegedly providing unfair support to Allpum through intra-group transactions, a case commonly described as “funneling business to affiliates.” The appeal of that penalty is currently pending before the Supreme Court of Korea.
In July 2024, the Seoul High Court ruled against Harim, upholding the antitrust regulator’s decision that the group had unfairly supported Allpum. The final ruling from the Supreme Court is now being closely watched.
Eight Harim Group companies—including Harim Holdings and Farmsco—were fined a combined 4.9 billion won for allegedly providing improper benefits to Allpum.
Allpum, which generates roughly 500 billion won in annual revenue, is wholly owned by Kim Jun-young, born in 1992. According to the Fair Trade Commission, Chairman Kim Hong-kuk transferred 100% of the shares of Allpum’s predecessor company to his son in January 2012, effectively placing him at the top of the group’s ownership structure.
The predecessor company, then known as Korea Thumb Vet Sales, later merged with a poultry company and was renamed Allpum in March 2013.
Through this structure, Kim Jun-young gained significant control over the group via a shareholding chain linking Allpum to Harim Holdings. He currently holds 24.02% of Harim Holdings through Allpum and was recently promoted to executive vice president at Pan Ocean earlier this year.
The Fair Trade Commission said that as Allpum became the core company for the group’s succession plan, Harim affiliates had incentives to support the firm to strengthen the controlling family’s ownership.
According to the regulator, several Harim subsidiaries provided excessive economic benefits to Allpum through overpriced purchases, pass-through transactions and the low-price sale of shares.
For example, pig farming subsidiaries purchased animal pharmaceuticals from Allpum at prices higher than market rates, while Harim’s feed companies bought feed additives through Allpum, effectively paying intermediary fees.
The regulator also alleged that Harim Holdings (then Cheil Holdings) sold shares of the former Allpum poultry business to the current Allpum entity at below-market prices, providing additional financial advantages.
Alphabiz Reporter Kim Jisun(stockmk2020@alphabiz.co.kr)
