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[Alpha Biz=(Chicago) Reporter Paul Lee] Hoban Construction was fined about 60.8 billion won by the Fair Trade Commission for giving work to the company's son for nearly a decade to inherit management rights. The amount of fines is the third largest in history.
"Hoban Construction carried out unfair internal transactions over a long period of time to inherit management rights to the second generation of the same person (head) by expedient," Yoo Sung-wook, director of the FTC's corporate group monitoring bureau, said in a press conference on the 15th. "Hoban Construction, controlled by the group's head Kim Sang-yeol, supported Hoban Construction & Housing owned by its eldest son Kim Dae-heon, its complete subsidiary and the second son's company."
The case dates back to 2003. Chairman Kim Sang-yeol set up Hoban Construction & Housing, a 100% stake owned by his eldest son Kim Dae-heon at the time, and gave the company a sales agency and a model house. As a result, Hoban Construction House, which had a capital of only 50 million won at the time of its establishment, saw its total capital rise to 184 billion won in less than a decade. This means that considerable profits have been accumulated. The proportion of internal transactions was close to 100%. This means that it has grown in size only by the volume of Hoban construction.
Hoban Construction Housing participated in the government's bidding for public housing during the 2013-2015 period, when it received a significant amount of the bid application from Hoban Construction. It also took over some of the public housing sites that Hoban Construction won. Hoban Industry, where Kim's second son, Kim Min-sung, is a major shareholder, also received the same kind of support from Hoban Construction. Former chairman Kim was found to have made a "beep bidding" that even mobilized group partners to bid to win public housing to hand over to his son's company.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
