Fair Trade Commission: "HDC Hyundai Development Company Delayed Issuance of Subcontract Documents and Nonpayment of Delay Interest... Correction Order and Fine Imposed"

Legal Violations by 190 Supply Contractors

[Sejong=Asia Economy Reporter Joo Sang-don] The Fair Trade Commission announced on the 2nd that it has decided to impose a corrective order and a fine of 30 million KRW on HDC Hyundai Development Company for unfair subcontracting practices, including late issuance of subcontract contracts to 190 subcontractors, non-payment of substitute payment fees for promissory notes and delayed interest on subcontract payments, and violation of the obligation to adjust subcontract payments.

According to the Fair Trade Commission, HDC Hyundai Development Company engaged in unfair subcontracting practices with 190 subcontractors from January 2016 to March 2019.

First, from January 2016 to March 2019, the company delayed issuing written contracts for 86 cases, including wet construction work, to 53 subcontractors by a minimum of 3 days and a maximum of 413 days after the subcontractors had started the contracted work (or began delivery).

Additionally, during the same period, HDC Hyundai Development Company paid subcontract payments to 46 subcontractors using substitute payment methods with a repayment period exceeding 60 days from the receipt date of the goods, but failed to pay fees amounting to 2,121,000 KRW for the period exceeding 60 days until the repayment date. For 35 subcontractors, the company delayed payment of subcontract payments beyond 60 days from the receipt date and failed to pay delayed interest amounting to 25,431,000 KRW for the overdue period.

During the same period, while receiving contract amount increases from the client due to design changes, the company did not notify 58 subcontractors of the reasons and details of the increase, and for 29 subcontractors, it concluded change contracts more than 30 days after receiving the increase from the client for 42 entrusted contracts.

Accordingly, the Fair Trade Commission ordered HDC Hyundai Development Company to prevent recurrence by refraining from repeating the same or similar acts in the future and imposed a fine of 30 million KRW.

A Fair Trade Commission official stated, "This measure is part of the 'efficiency and acceleration plan for handling cases involving multiple reports against a business operator,' and it is expected to serve as an opportunity to improve unfair subcontracting practices of business operators with multiple reports. The Fair Trade Commission will continue to strictly investigate business operators with multiple reports to establish a fair subcontracting transaction order."

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