Chaebol fined for not reporting transactions

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Chaebol fined for not reporting transactions

The Fair Trade Commission levied fines on three conglomerates, Daewoo Shipbuilding and Marine Engineering, CJ Group and LS Group, totaling 610 million won ($556,370) for omitting or delaying reports on internal transactions among their subsidiaries.

Under the Monopoly Regulation and Fair Trade Act, the state-run commission requires any conglomerate to report business contracts or transactions among their subsidiaries worth more than 5 billion won or more than 5 percent of their total capital.

The commission said in a report Wednesday that 10 LS Group subsidiaries omitted or delayed reporting 22 times. One of them was LS Cable and System, which had transactions in regards to commodities and labor services with its subsidiary Gaon Cable. LS Cable profited from the business with the Gaon Cable, but they were 37 days late in publicly reporting some of those profits to investors.

LS Group was fined about 440 million won for the violations, the commission said.

Daewoo Engineering was fined about 131 million won for nine violations, according to the commission. CJ violated the rule in five instances and was hit with a 36 million won fine.

Nineteen of the 39 violations by the three groups were failures to report, the commission said. Fourteen were delayed reports and three were omissions of core details.

The government-controlled commission has been in charge of cracking down on monopolistic practices or other unfair trade among conglomerates and any attempts to cover up extra profits from internal transactions among their subsidiaries.

The supervisory body issues audits of internal transactions of major conglomerates twice in a year. Executives and managers of the conglomerates said the failure to report or the tardiness were simple mistakes.

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