[Alpha Biz= Kim Jisun] The Korea Fair Trade Commission (KFTC) has initiated sanction procedures against affiliates of SM Group over allegations of unfair internal transactions.
According to industry sources, the KFTC recently sent a review report (“Simsa Bogoseo”) to SM Group affiliates, including SM AMC Investment Finance and HN E&C, outlining suspected violations of the Monopoly Regulation and Fair Trade Act.
The KFTC is said to have determined that SM AMC engaged in unfair practices by channeling an apartment development project to a company previously owned by the second daughter of SM Group Chairman Woo Oh-hyun. The review report includes the facts identified by the authority and its preliminary opinion that sanctions are warranted. In legal terms, the report is similar to an indictment in criminal proceedings.
SM Group will be given the opportunity to submit its objections or counterarguments. The KFTC is expected to convene a plenary session to discuss the level of sanctions after reviewing SM Group’s response.
Earlier in February, the KFTC conducted an on-site investigation at SM Group’s headquarters as part of its probe into allegations of unfair internal transactions.
Alphabiz Reporter Kim Jisun(stockmk2020@alphabiz.co.kr)
