Fair Trade Commission: "Korean Air, Hanjin KAL, Jin Air Failed to Properly Report Family-Owned Shares... Warning Issued"

Kiwoom Securities, Kiwoom Private Equity, and SDJ Warned for Missing Affiliate Incorporation Reporting Deadline

[Sejong=Asia Economy Reporter Joo Sang-don] The Fair Trade Commission has decided to sanction three companies?Korean Air, Hanjin KAL, and Jin Air?for failing to properly report the shares held by relatives of the same individual (the controlling shareholder).

On the 17th, the Fair Trade Commission announced that it recently made a summary resolution to issue warnings to the three companies affiliated with Hanjin, a mutual shareholding restricted business group, for violating the stock ownership reporting regulations under the Fair Trade Act.

The Fair Trade Commission designates large business groups annually on May 1 based on the size of their assets. If total assets exceed 5 trillion won, the group is designated as a "publicly disclosed business group" (large business group). Among these, if total assets exceed 10 trillion won, the group becomes a "mutual shareholding restricted business group."

Once designated as a large business group, affiliates and special related parties (the controlling individual's spouse, relatives within six degrees of blood relation, and relatives within four degrees of affinity) must report the number of shares they own in the respective companies to the Fair Trade Commission.

In its resolution, the Fair Trade Commission stated, "Although the three companies affiliated with Hanjin could have identified the status of shares held by relatives for each affiliate based on the known status of relatives at the time of reporting stock ownership, they failed to properly verify this, indicating a significant possibility of awareness of the legal violation."

However, considering that the number of falsely reported shares ranged from a minimum of one share to a maximum of 2,000 shares, which is minimal, and that the falsely reported shares were voluntarily reported during the investigation of related cases, the Commission judged the severity to be minor and decided to issue a warning.

Additionally, SDJ, affiliated with the mutual shareholding restricted business group Lotte, and Kiwoom Securities and Kiwoom Private Equity, affiliated with the large business group Daou Kiwoom, were found to have failed to report changes in affiliates within the deadline and received warnings. Furthermore, the Agricultural Cooperative Asset Management Company, a financial and insurance company affiliated with the mutual shareholding restricted business group Nonghyup, was warned for violating voting rights restriction regulations.

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