Mirae Asset Avoids Prosecution... 4.4 Billion KRW Fine Imposed

Fair Trade Commission "No Involvement of Owner in Preferential Business Allocation"
Possible Entry into New Industries Such as Promissory Notes

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

[Asia Economy Reporters Joo Sang-don and Moon Chae-seok] Mirae Asset Group has avoided prosecution by the Fair Trade Commission (FTC). Although the FTC found that Mirae Asset Group unfairly concentrated work orders on affiliates with large stakes held by the controlling family, it judged that there was no direct involvement by the controlling family in the process, deciding to impose fines instead of referring the case to the prosecution.

On the 27th, the FTC announced that it would issue corrective orders and impose fines totaling 4.391 billion KRW on Mirae Asset affiliates for unfairly conferring benefits to related parties. For Mirae Asset Group, this means avoiding the worst-case scenario of prosecution against Chairman Park Hyun-joo, facing only corrective orders and fines.

Jung Jin-wook, Director of the FTC’s Corporate Group Division, explained, "Mirae Asset Group’s affiliates engaged in transactions of significant scale with Mirae Asset Consulting, which holds a 91.86% stake by related parties, without reasonable consideration or comparison, gaining benefits. However, we found no direct instructions from Chairman Park regarding the use of golf courses or hotels during this process."

The FTC raised concerns about Mirae Asset Group’s private interest appropriation, work order concentration, and the governance structure centered around Chairman Park. The investigation was based on the view that the Park family funneled group work orders and operational profits to Mirae Asset Consulting, which holds an overwhelming 91.86% stake.

Mirae Asset Group’s management involved its affiliates 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 work order concentration. 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 Securities and Mirae Asset Life Insurance.

Chairman Park reclassified Mirae Asset Securities and Mirae Asset Life Insurance from subsidiaries of Mirae Asset Capital to affiliates, but the FTC remained suspicious regarding Mirae Asset Consulting.

In November last year, the FTC Secretariat concluded that funneling work orders 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 its decision on sanctions and penalties against Mirae Asset Group to this month for additional deliberation.

By avoiding prosecution from 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 citing controversies over Chairman Park’s qualifications as a major shareholder.

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