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SPC Group fined 67.4 bln won for alleged unfair practices

All News 15:27 July 29, 2020

SEJONG, July 29 (Yonhap) -- South Korea's antitrust regulator said Wednesday it fined SPC Group, which operates the nation's largest bakery chain, 67.4 billion won (US$56.4 million) for alleged unfair practices of awarding business contracts to its affiliates.

The fine is the biggest ever doled out by the Korea Fair Trade Commission (KFTC) to punish a business group for allegedly violating a law that bans unfair business practices among the group's affiliates.

The KFTC also referred three top executives of SPC, including Chairman Hur Young-in, to prosecutors for further investigation.

According to the KFTC, SPC, owner of the bakery chain Paris Baguette, helped the group's only listed affiliate, SPC Samlip, earn 41.4 billion won between 2011 and 2019 by awarding contracts to SPC Samlip.

The KFTC rejected SPC's arguments that SPC Samlip had played a role of distributors for the group's affiliates.

The KFTC criticized SPC for allegedly supporting SPC Samlip to make it easier for the chairman's children to take the wheel at the group.

Sales of SPC Samlip jumped to 1 trillion won in 2017 from 296 billion won in 2010.

SPC Samlip's stock price skyrocketed to 415,000 won per share in August 2015, compared with some 10,000 won in early 2011, according to the KFTC.

The latest investigation comes amid efforts by the KFTC to crack down on unfair business practices and create a level playing field for all companies.

Since last year, the KFTC has launched investigations into about 100 medium-sized companies.

A key issue is whether medium-sized companies award business contracts to their subsidiaries at lower prices and whether these lucrative contracts undermine competition.

SPC Group fined 67.4 bln won for alleged unfair practices - 1

kdh@yna.co.kr
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