Alphabiz - HDC Pushes Back Against Antitrust Fine Over Alleged Affiliate Support

Chung Mong-gyu  (Photo=Yonhap News Agency)

[Alpha Biz= Kim Jisun] HDC has strongly contested a regulatory decision imposing fines over alleged unfair support to its affiliate, arguing that the measures were part of a legitimate effort to support tenants and revitalize a struggling commercial complex.

On April 8, HDC issued a statement responding to a penalty imposed by the Korea Fair Trade Commission, which determined that the company effectively provided KRW 36 billion (approximately $27 million) in interest-free financial support to HDC I-Park Mall under the guise of lease agreements.

HDC rejected the findings, stating that it had entered into lease and management agreements under the same conditions as other commercial unit owners to support tenants facing severe vacancies at the Yongsan commercial complex.

“The decision to classify this as indirect financial assistance is deeply regrettable,” the company said, emphasizing that the move was intended to ensure coexistence and protect small business operators affected by high vacancy rates.

HDC also disputed claims that its actions harmed fair market competition, noting that the Yongsan private railway station development operates under a special regulatory framework and does not function as a fully open competitive market.

The company added that its participation helped resolve vacancy issues, allowing tenants to avoid management fee burdens and preserve their deposits.

HDC stated it will pursue legal action to demonstrate that the transactions were legitimate and based on reasonable business judgment.

The antitrust regulator, however, concluded that the arrangement constituted unfair support that gave the affiliate an advantage over competitors. It imposed a combined fine of approximately KRW 17.13 billion on HDC and its affiliate and referred HDC for prosecution.

Alphabiz Reporter Kim Jisun(stockmk2020@alphabiz.co.kr)