 |
Photo courtesy of Youngone |
[Alpha Biz= Kim Jisun] South Korea’s antitrust authority is stepping up enforcement against corporate violations, moving to refer another conglomerate chairman for criminal prosecution.
The Korea Fair Trade Commission (KFTC) said on Sunday that it has decided to file a criminal complaint with prosecutors against Sung Ki-hak, chairman of the Youngone Group, for alleged violations of disclosure rules governing large business groups.
The decision marks the second criminal referral of a conglomerate owner this year, following the referral earlier this month of Kim Jun-ki, founder of the DB Group. Only one such referral was made in all of last year, underscoring what officials and industry observers describe as the KFTC’s stronger resolve to penalize unlawful conduct.
Earlier, the KFTC imposed fines totaling around KRW 400 billion—the second-largest penalty in its history—on three sugar manufacturers and distributors, CJ CheilJedang, Samyang Corp, and Daehan Sugar, for collusion related to sugar pricing.
According to the KFTC, Sung deliberately omitted a total of 82 affiliated companies from the designation filings he submitted over a three-year period, thereby avoiding classification as a disclosure-designated large business group. The omissions were found in filings submitted between 2021 and 2023 and represent the largest case of false or incomplete designation filings uncovered to date, both in scale and in duration.
Specifically, the KFTC said Sung failed to disclose 69 affiliates in 2021, 74 in 2022, and 60 in 2023, with overlapping entities excluded, resulting in 82 omitted companies in total. The combined assets of the omitted companies amounted to approximately KRW 3.24 trillion.
The omitted entities included companies wholly owned by Sung, as well as firms owned by his daughters, younger brother, and nephew. While the KFTC noted that its requirement to submit only key designation materials was intended to reduce administrative burdens, it said Sung’s actions exploited the simplified filing format.
Youngone converted to a holding company structure in 2009. Despite meeting the asset threshold, the group avoided designation as a disclosure-targeted conglomerate from 2021 to 2023 due to the affiliate omissions, and was first included on the list only in 2024.
The KFTC said that given Sung’s decades-long management experience—having led the group since its founding in 1974—it is difficult to believe he was unaware of the scope of affiliated companies, adding that responsibility for the omissions is particularly serious.
Some observers, however, have cautioned that repeated criminal referrals of conglomerate heads may not be the most effective solution. Experts argue that strengthening preventive oversight and disclosure management systems would be more effective than relying solely on criminal punishment of controlling shareholders.
Alphabiz Reporter Kim Jisun(stockmk2020@alphabiz.co.kr)
