Mirae Asset Avoids Prosecution... 4.39 Billion KRW Fine and Corrective Order (Update)

Chairman Hyun-Joo Park of Mirae Asset Group. (Photo by Mirae Asset Group)

[Asia Economy Reporter Moon Chaeseok] Mirae Asset Group has avoided prosecution by the Fair Trade Commission (FTC). The FTC raised concerns over the group’s affiliates conducting transactions of significant scale with Mirae Asset Consulting, which sits at the top of the group’s governance structure, without reasonable consideration or comparison. It was deemed that unfair benefits were conferred to related parties.

On the 27th, the FTC announced that it would impose corrective orders and a fine of 4.391 billion KRW on Mirae Asset Group. From the group’s perspective, this means avoiding the worst-case scenario of Chairman Park Hyun-joo being prosecuted, instead facing only corrective orders and fines.

The FTC criticized Mirae Asset Group for self-dealing, preferential allocation of work, and a governance structure centered around Chairman Park. It conducted an investigation based on the view that the Park family, holding an overwhelming 91.86% stake in Mirae Asset Consulting, had funneled group work and operational profits to their interests.

Mirae Asset Group’s affiliates have managed operations by investing in the Four Seasons Seoul Hotel and Blue Mountain Country Club through funds, then entrusting operations to Mirae Asset Consulting. The FTC judged this as “preferential allocation of work.” The group’s governance structure is arranged such that Mirae Asset Consulting controls Mirae Asset Capital and Mirae Asset Global Investments, and Mirae Asset Capital controls Mirae Asset Daewoo and Mirae Asset Life Insurance.

An FTC official explained, “Mirae Asset Group’s affiliates conducted transactions of significant scale with Mirae Asset Consulting, in which related parties hold 91.86% of shares, without reasonable consideration or comparison. We decided to impose corrective orders and a fine of 4.391 billion KRW for the act of conferring unfair benefits to related parties.”

Chairman Park reclassified Mirae Asset Daewoo and Mirae Asset Life Insurance from subsidiaries of Mirae Asset Capital to affiliated companies, but the FTC remained suspicious about Mirae Asset Consulting. In November last year, the FTC’s secretariat concluded that preferential allocation of work to Mirae Asset Consulting was illegal and sent a review report (equivalent to a prosecution indictment) to Mirae Asset Group recommending corrective orders, fines, and prosecution. In March, the FTC postponed the decision on sanctions and criminal referral for additional review until this month.

The decisive reason the FTC did not prosecute is understood to be the lack of concrete evidence of Chairman Park’s self-dealing. Although self-dealing by Chairman Park is suspected in the governance structure, no specific involvement by him was detected in the process of affiliates assigning work related to invested companies to Mirae Asset Consulting.

By avoiding prosecution by the FTC, Mirae Asset Group can now enter the issuance of promissory notes market. The financial authorities no longer have grounds to deny approval for the promissory note business on the basis of controversy over Chairman Park’s qualifications as a major shareholder.

This content was produced with the assistance of AI translation services.