Fair Trade Commission: "Shin Taeyang Construction Shifts Unsold Commercial Spaces to Subcontractors... Correction Order and 100 Million KRW Fine"

[Sejong=Asia Economy Reporter Joo Sang-don] Shintaeyang Construction, which forced subcontractors to take over 7 unsold commercial units, will be sanctioned by the Fair Trade Commission.

The Fair Trade Commission announced on the 30th that it imposed a corrective order and a fine of 100 million won on Shintaeyang Construction for demanding subcontractors to purchase unsold commercial units, thereby causing the commercial unit sales developer to provide unfair economic benefits.

According to the Fair Trade Commission, in June 2017, Shintaeyang Construction required subcontractors to purchase 7 unsold commercial units (approximately 1.73 billion won) from Sun & Moon, the officetel sales developer in Sinjeong-dong, Ulsan, to assist Sun & Moon.

At that time, although 14 months had passed since Sun & Moon sold the commercial units in April 2016, the sales rate was 33.8%, failing to meet the standard (50%), and the loan agreement with financial institutions was scheduled to be canceled at the end of July 2017.

Therefore, despite having no intention to purchase the commercial units, the subcontractors purchased the 7 units from Sun & Moon as requested by Shintaeyang Construction in order to conclude and maintain a subcontract contract (contract amount 7.45 billion won) with Shintaeyang Construction.

As a result, the third party, Sun & Moon, fulfilled the loan conditions with financial institutions and gained economic benefits by securing liquidity, while the subcontractors suffered financial losses.

A Fair Trade Commission official stated, "This action sanctions the principal business operator for using its transactional position to impose economic burdens unrelated to the contract on subcontractors," and added, "The Fair Trade Commission will monitor and strictly sanction any acts that unfairly burden subcontractors, such as demanding them to purchase unsold commercial units through subcontract contracts."

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