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13 S. Korean Media Companies Charged Penalty Fines
The Fair Trade Commission (FTC) of South Korea June 21 announced that it charged the penalty fines of 24.2 billion won in total on 13 major media companies who have executed the unfair in-house trading of 543.4 billion won for the past four years. For the first time, the FTC investigated the illegal in-house trading on the private companies, excluding the 30 top conglomerates and the state-owned companies.
The FTC reviewed the illegal internal transactions of 10 newspaper companies and 3 broadcasting companies in the all-staff meeting on 20th, and announced the breakdown of the fines by company with the correction command yesterday.
Lee Han-Uk, the director of the Investigation Bureau, told that ``the 13 major media companies have been involved in the unfair transactions with their affiliates, amounting to 543.4 billion won from April 1997 to March 2000, and thus the FTC levied the fines of 24.2 billion won on 13 media companies and their subsidiaries``.
The FTC levied the largest penalties 6.2 billion won on the Donga-Ilbo and its affiliates, 3.4 billion won on the Chosun Ilbo and its affiliates, and 2.5 billion won on the Joongang Ilbo and its affiliates. And it charged 2.9 billion won on the Munhwa Ilbo and its affiliates on suspicions of the illegal support from the 12 Hyundai affiliates such as Hyundai Heavy Industries Co. after its separation from the Hyundai group. The fines on the broadcasting companies are as follows; SBS 1.5 billion won, MBC 1.3 billion won, and KBS 1.1 billion won.
But only a small amounts of the fines were charged on the Segye Ilbo and its affiliates (40 million won), Hankyoreh (20 million won), and Daehan Maeil (140 million won).
The FTC revealed that the investigated media companies have advertised their affiliates without charge, or have not received the contents fee from the internet subsidiaries, and have supported their affiliates by purchasing Commercial Papers (CP) for a low price and providing the genuine bills.
Director Lee told that ``because the investigation on the unfair in-house trade was conducted for the first time, we decided not to charge them to the prosecutors office. And if the National Tax Office requests the data, we will hand them over ``.
However, the newspaper companies such as Donga, Chosun, Joongang and Hankook are likely to resist to the FTC`s decision through a formal objection or an administrative litigation. These media companies told that ``the FTC overestimated the scale of the unfair in-house trade by applying the fair trade law too comprehensively. The FTC misled that the media companies have been indulged in the unfair transactions with the affiliates by treating the break-up for the corporate restructuring as problematic``.
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