Sungjoo CEO resigns amid investigation

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Sungjoo CEO resigns amid investigation

Kim Sung-joo, founder and CEO of Sungjoo Group, which operates the global luxury fashion brand MCM, recently was found to have resigned from her post in early June, amid the Fair Trade Commission’s probe into the company’s dealings subcontractors.

Four subcontractors filed complaints against the fashion giant in March, claiming Sungjoo Group tried to take unfair benefits from subcontractors with high pricing and refund policies. When the Korea Fair Trade Mediation Agency failed to come to a conclusion, the issue was handed to the FTC and Kim was scheduled for questioning on June 27.

But with Kim found to have ditched her CEO post as of June 1, the company’s co-representative Yoon Myeong-sang attended the questioning session. Sungjoo Group claims this was a strategic move to venture overseas and expand its foothold there.

Early this month, Kim had also resigned from her chief position at the Red Cross Organization with only three months left to her three-year tenure. Kim was speculated to have been close to former President Park Geun-hye.

CJ Group has also come under fire lately with its health and beauty franchise, Olive Young, receiving a thorough investigation into its business transactions. On Tuesday, FTC has reportedly looked into the retail process of items being sold in Olive Young.

“The investigation has been going on for two days but it wasn’t anything urgent,” said a spokesman for CJ Olive Networks, an operator of Olive Young.

FTC’s new head, Kim Sang-jo, announced earlier that he is going to pay keen interest to the so-called specialty stores in Korea, which can be represented by beauty and fashion stores.

FTC’s MCM investigation is the latest in a series of looks into Korean retail companies since Kim Sang-jo became its new head.

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