Koas Claims Unfair Administrative Sanctions by Fair Trade Commission... Reviewing Legal Procedures

"Accepting One-Sided Claims of Partner Company, Will Fully Explain Unfair Parts in Lawsuit"

Exterior view of the Koas building in Dangsan-dong, Seoul.
[Photo by Koas]

[Asia Economy Reporter Kim Jong-hwa] Office furniture specialist company Koas expressed its grievance over the sanctions imposed by the Fair Trade Commission and announced on the 17th that it is reviewing legal procedures.

On the 13th, the Fair Trade Commission ordered Koas to pay an amount including a corrective order for recurrence prevention, a reduction amount of 185 million KRW, and delayed interest (annual interest rate of 15.5%), and imposed a fine of 167 million KRW for violating the Subcontracting Act. The reason was that Koas reduced subcontract payments of about 185 million KRW 20 times without justifiable reasons from September 2015 to July 2018.

Koas expressed deep regret that the Fair Trade Commission did not sufficiently consider the characteristics of transactions between small and medium-sized enterprises and the context in which the dispute arose, and stated that it is reviewing legal procedures such as filing an administrative lawsuit against the recent Fair Trade Commission decision.

Koas stated that considering the practical situation where delivery schedules must be met according to the transaction volume and timing desired by customers, there is a common understanding with partner companies regarding efficient work processes that reduce administrative costs and time within the scope permitted by law.

Therefore, Koas claimed that regarding this dispute as well, the two companies have maintained their relationship without problems after consulting through the SCM (Supply Chain Management system) in a digital written form, and that flexible standards reflecting industry realities should be applied.

Koas explained that the reduction of subcontract payments was also an unavoidable realistic adjustment because the prices proposed by the partner companies were significantly higher than market prices, and that it was conducted through consultation considering the increase in the volume delivered by the partner companies.

Furthermore, Koas argued that the essence of this dispute lies in the partner company's clear breach of contract. The dispute began because the partner company subcontracted production to a third party without any consultation with Koas and continued to take only commissions.

A Koas official said, "It is impossible to have a superior position over partner companies and unilaterally impose transaction conditions," adding, "It is regrettable that only the partner company's unilateral claims were accepted based on a dichotomous perception that the superior party naturally holds a dominant position, excluding these practical aspects."

The official also added, "This sanction should be reconsidered regarding the special nature of subcontract transactions between small and medium-sized enterprises and the fundamental essence of dispute occurrence," and "We will thoroughly explain the unfair parts during the lawsuit process after reviewing the legal aspects."

Meanwhile, Koas gained global recognition by supplying chairs for the 2010 Seoul G20 Summit. Last year, it recorded sales of 98.2 billion KRW and is one of the top three companies in the office furniture market.

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