Prosecutors Launch Full Investigation into SPC Accused by Fair Trade Commission of Unfair Support to Affiliates

Seoul Central District Prosecutors' Office Fair Trade Investigation Division Assignment

Seoul Central District Prosecutors' Office building in Seocho-dong, Seoul.
[Image source=Yonhap News]

[Asia Economy Reporter Choi Seok-jin] The prosecution has launched a full-scale investigation into the SPC Group’s ‘unfair support of affiliates’ allegations reported by the Fair Trade Commission.

According to the legal community on the 7th, the Fair Trade Investigation Division of the Seoul Central District Prosecutors' Office (Chief Prosecutor Kim Min-hyung) has been reviewing the case assigned to them last month, in which the Fair Trade Commission filed charges against SPC Group Chairman Heo Young-in, General President Cho Sang-ho, and Paris Croissant CEO Hwang Jae-bok.

According to the Fair Trade Commission’s investigation, from September 2013 to July 2018, SPC funneled transit fees by requiring three bakery affiliates, including Paris Croissant, to purchase products from eight production affiliates, including Mildawon, through SPC Samlip.

Samlip profited by buying flour from production affiliates at 740 won and selling it to bakery affiliates at 779 won.

The Fair Trade Commission’s accusation states that the profits provided by SPC to Samlip through such unfair support methods amounted to approximately 41.4 billion won over about seven years from April 2011 to April 2019.

The Fair Trade Commission judged that SPC engaged in such unfair support practices to raise the stock price of Samlip, the only listed company within the group, thereby maintaining the controlling family’s dominance and facilitating the succession of management rights.

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