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Tue, Oct 07, 2003 - Page 12 News List

South Korea's top companies fined for illegal activities

AFP , SEOUL

South Korea's anti-trust watchdog said yesterday that Samsung and four other major conglomerates have been fined for illegal cross-unit transactions.

The Fair Trade Commission imposed a combined fine of 31.5 billion won (US$27.2 million) on Samsung Group, LG Group, SK Group, Hyundai Motor and Hyundai Heavy Industries.

SK was fined the largest amount of 28.6 billion won. Hyun-dai Motor was slapped with a fine of 2.5 billion won, Samsung 220 million won, shipbuilding giant Hyundai Heavy Industries 97 million won and LG 68 million won.

The fines were the result of an inquiry into cross-unit transactions, insider-trading among group affiliates and other illegal practices by the top conglomerates.

Commission officials say the business groups are still engaged in cross-unit transactions to subsidize weak units, although the extent of such activities showed a sharp fall compared to the past.

"As a whole, business groups have made efforts to correct unfair internal transactions although some of them were still engaged in old practices," one official said.

The commission accused the five groups of using a total of 90 billion won for illegal inter-unit transactions, compared to 126.2 billion won three years ago.

The conglomerates are under pressure to disclose their detailed ownership structure.

Critics say the owners have been engaging in illegal moves to evade taxes by transferring wealth to their children.

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