Antitrust watchdog fines SPC Group record-high $54 million
South Korea’s Fair Trade Commission (FTC) asked the prosecution to investigate SPC Group Chairman Hur Young-in and two other senior executives for violation of antitrust laws.
The watchdog also said earlier this week that it decided to levy a fine of 64.7 billion won ($54 million) on the Seoul-based food giant, the record amount for any case related to improper transactions.
The other two are former group head Cho Sang-ho and Paris Croissant chief executive Hwang Jae-bok, who the FTC suspects of having been involved in dubious internal trades.
At issue is Samlip, the only listed company of the SPC Group. Samlip is accused of having collected “taxes” from the group’s affiliates in various ways as part of efforts to support father-to-son power transfer.
Samlip is practically owned by Chairman Hur and his two sons through group subsidiaries and direct shareholdings. Paris Croissant is the biggest stockholder with 40.66 percent.
Chairman Hur owns 4.64 percent, while his two sons’ combined stakes near 29 percent.
SPC reportedly said that its governance structure is designed to achieve vertical integration, but the FTC did not buy the explanation to come up with the “excessive measures.”
SPC plans to decide how to respond after checking the FTC documents, the group told reporters.
This is a new legal challenge for Chairman Hur, who has just dealt with a previous one.
In late 2018, a Seoul district court convicted him of breach of duty, but he could avoid jail time as the sentence was suspended. The charge was that he allegedly offered the trademark of Paris Croissant to his wife so that she could earn tens of millions of dollars in loyalty incomes.
To the relief of Hur, however, the appeals court acquitted the 70-year-old entrepreneur, who has a moniker of “Korea’s bread king,” this January and the top court confirmed it in July.