Fair Trade Commission to Reduce Fines for Prompt Correction of 'Disclosure Violations'... Research Service Project Underway

Fair Trade Commission Chairman Cho Sung-wook is giving a speech at the site visit and meeting with exemplary companies in the dealership sector related to COVID-19, held on the 28th at the Maeil Dairies headquarters in Jongno-gu, Seoul. Chairman Cho visited the site to encourage Maeil Dairies' efforts for mutual growth with its dealerships. Previously, Maeil Dairies increased promotional support funds for milk products to dealerships nationwide by four times, provided masks and hand sanitizers, and supported fuel expenses. Photo by Kim Hyun-min kimhyun81@

[Asia Economy Sejong=Reporter Dongwoo Lee] The Fair Trade Commission (FTC) is planning to reduce fines for large business groups that miss disclosure deadlines if they promptly correct the violations. Since the purpose of disclosure is to provide accurate information to the market, the aim is to encourage quick corrections by reducing fines for minor delayed disclosures.

The FTC announced on the 30th that it will conduct a research project on reforming the disclosure system, including this measure, during the first half of this year.

The FTC annually checks whether large business groups comply with three disclosure obligations under the Fair Trade Act: ▲ board resolutions and disclosures of large-scale internal transactions ▲ disclosures of important matters by unlisted companies ▲ disclosures of the status of business groups.

As a result of checking the disclosure compliance of 2,612 companies belonging to 71 large business groups designated in May last year, it was found that 107 companies from 40 business groups violated a total of 131 cases. Among these, delayed disclosures accounted for about 76.3% (100 cases) of the total.

According to the fine imposition criteria for disclosure violations, if the delay in disclosure is three days or less, it is classified as a minor violation and 50% of the fine is waived.

The FTC currently considers the fine reduction period to be excessively short and is considering extending the number of days eligible for fine reduction while slightly lowering the reduction rate. Measures to reduce fines for quickly correcting simple errors such as numerical typos or for corrections made during a special inspection period for disclosure compliance are also being discussed.

Additionally, to promote ESG (Environmental, Social, and Governance) management among large business groups, the FTC is working to identify governance-related disclosure items such as the "status of executives from the controlling family."

The FTC plans to finalize the direction of the disclosure system reform through research projects and stakeholder consultations to promote ESG management among large business groups, including identifying governance-related disclosure items like the "status of executives from the controlling family."

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