Samsung Welstory's transfer-pricing remedy rejected by FTC
Samsung Welstory’s response to an anti-trust complaint from the Fair Trade Commission (FTC) has been rejected by the regulator.
The FTC has found that companies related to the Samsung C&T catering subsidiary had guided business toward it at higher-than-market prices, in effect transferring wealth to Samsung C&T. The companies are Samsung Electronics, Samsung Display, Samsung Electro-Mechanics and Samsung SDI.
On Thursday, the regulator said the five, including Samsung Welstory, had submitted a plan for addressing the transfer-pricing issue.
Included in the package was the opening the food supply at 68 cafeterias to competition, investing 30 billion won in smart factories, creating a 150-billion-won fund to invest in food companies and spending 5 billion won on consulting for food companies. The companies also offered to spend 10 billion won supporting 450 daycare centers and 5 billion won on food banks.
The FTC rejected the proposal without elaborating.
It has been investigating the case for three years and looking into the possibility that the transfer pricing supported Lee Jae-yong, who owns 18.1 percent of Samsung C&T and is the company’s largest shareholder.
Because of the rejection, the companies could face fines or be referred to the prosecution for criminal penalties.
In February, the FTC approved Apple’s remedy for its own anti-trust violations. It was found to have shifted the cost of repair and marketing to Korean telecommunication companies.
Apple agreed to pay 100 billion won, of which 25 billion won will be used to cover the cost of AppleCare extended warranties.
BY LEE HO-JEONG [firstname.lastname@example.org]