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Photo courtesy of Yonhap News |
[Alpha Biz= Kim Jisun] South Korea’s Fair Trade Commission (FTC) has imposed corrective orders and a KRW 38 million fine on SL Corporation for violating subcontracting laws, citing delayed contract issuance and late payments to suppliers.
According to the FTC on May 5, SL outsourced 328 mold manufacturing projects for automotive parts to 40 subcontractors between May 2020 and May 2023. However, the company issued written contracts only after work had already begun—ranging from delays of 8 days to as long as 605 days—violating legal requirements that mandate contract documentation prior to project commencement.
Additional violations were identified in payment practices. Across 342 contracts with 41 subcontractors, SL paid outstanding balances more than 60 days after receiving deliverables, either in cash or promissory notes, without compensating for overdue interest or discount fees.
The unpaid amounts totaled approximately KRW 7.29 billion, including KRW 5.06 billion in delay interest and KRW 2.19 billion in note discount fees. Under Korean law, such payments must include interest for delays beyond 60 days and discount costs when using promissory notes.
SL settled the unpaid amounts in full after the FTC launched its investigation. Taking this into account, the regulator issued only a warning for the delayed payment violations but imposed corrective measures and a fine for the delayed issuance of contracts.
SL, a KOSPI-listed company based in Daegu, produces automotive lighting and electrification components, reporting KRW 5.24 trillion in revenue last year on a consolidated basis.
The FTC noted that delayed contract issuance and late payments remain common in the mold manufacturing sector and pledged continued monitoring and strict enforcement against unfair subcontracting practices.
Alphabiz Reporter Kim Jisun(stockmk2020@alphabiz.co.kr)
