Hyundai sued for false reporting

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Hyundai sued for false reporting

The nation’s antitrust agency has decided to report Hyundai Group Chairwoman Hyun Jeong-eun to the prosecutors’ office for falsified documents regarding affiliates owned by her families and relatives.

Hyundai Group became the first conglomerate in the country to be fined for illegal business deals among its affiliates in May. In September, the Fair Trade Commission asked prosecutors to investigate Lotte Group’s 95-year-old patriarch Shin Kyuk-ho for intentionally falsifying documents regarding the conglomerate’s structure of affiliates.

According to the FTC, Hyundai Group deliberately failed to report 3B, HST, Hometech Style Korea, H Avenue & Company, Hyundai SNS and Lab & Partners as Hyundai Group affiliates on official documents submitted as far back as 2000.

The companies are owned by chairwoman Hyun’s sisters or their husbands. One company is owned by a cousin. These facts were hidden due to the omission of these companies’ information by not listing them as affiliates.

The chairwoman’s older sister Hyun Il-seon owns Hometech Style, a bed-related goods and curtain wholesale company, while the younger sister Hyun Ji-seon and her spouse are the owners of HST, a computer and office supply and repair company, and 3B, a liquid fuel wholesaler.

Cousin Chung Mong-hyuck owns H Avenue & Company, which specializes in construction equipment and lighting; Hyundai SNS, a building and facility management company and Labs & Partners a construction product wholesaler.

The FTC told Hyundai Group in 2014 that it must include HST and Hometech Style Korea as affiliates dating to June 2000 and for 3B to be listed as an affiliate from October 2009. Additionally in March this year the FTC ordered the Korean conglomerate to include H Avenue & Company, Hyundai SNS and Lab & Partners as Hyundai Group affiliates from Jan. 1, 2006.

However, Hyundai group only listed 3B, HST, Hometech Style Korea as affiliates since 2014 and added H Avenue & Company, Hyundai SNS and Lab & Partners as the affiliate of Hyundai Group on 2016 documents.

FTC said Hyundai Group was required to give detailed documents regarding these companies to the date that they were supposed to record as conglomerates, but failed to do so.

“Hyundai Group has falsified documents as far back as 14 years [by failing to turn in related documents of these affiliates run by Hyun’s sibling and relatives] while providing unfair profits to those with special interest [to the chairwoman],” said Kim Jung-ki, an official at the FTC.

In May the FTC reported that Hyundai Logistics signed a three-year delivery contract worth 1.5 billion won ($1.3 million) in 2015 despite the fact that 3B has no experience in the logistics business.

Hyundai Securities bought computers and related products from HST since 2012 and reportedly pocketed 1.9 billion won of unfair profit from the transaction.

The FTC in May fined Hyundai Securities and Hyundai Logistics 1.29 billion won for offering exclusive work contracts to 3B and HST.

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