Prosecutors Conduct Search and Seizure at Chairman Cho Hyun-beom's Office of Hankook Tire over 'Unfair Support to Affiliates'

Prosecutor's flag hanging in front of the Central District Prosecutors' Office in Seocho-dong.
[Image source=Yonhap News]

[Asia Economy Reporter Kim Hyung-min] On the 24th, the prosecution investigating the unfair support case of Hankook Tire & Technology (hereinafter Hankook Tire) conducted a search and seizure of three affiliates of the Hankook Tire Group, including Hankook Tire, holding company Hankook & Company, and MKT (Hankook Precision Works), as well as one related company. The search and seizure targets included the office of Cho Hyun-beom, chairman of the Hankook Tire Group.

The Fair Trade Investigation Division of the Seoul Central District Prosecutors' Office (Chief Prosecutor Lee Jung-seop) is reported to have secured materials related to the 'new price policy' implemented by Hankook Tire to support its affiliate MKT through this search and seizure.

Earlier, the Fair Trade Commission, which investigated the unfair support suspicions of Hankook Tire, concluded that from February 2014 to December 2017, Hankook Tire unfairly supported MKT by purchasing tire molds manufactured by MKT at prices higher than those of other manufacturers.

During the period of unfair support, MKT recorded sales of 87.52 billion KRW, gross profit of 37.02 billion KRW, and operating profit of 32.37 billion KRW. MKT's gross profit margin reached 42.2%, which was 12.6 percentage points higher than that of its competitors.

The Fair Trade Commission judged that the profits from the unfair support flowed to the Hankook Tire family. MKT paid dividends totaling 10.8 billion KRW to the family, including 6.5 billion KRW to Chairman Cho Hyun-beom and 4.3 billion KRW to Advisor Cho Hyun-sik during 2016?2017.

The prosecution plans to analyze the seized materials to verify whether Chairman Cho and other family members were involved or directed the implementation process of the new price policy. If concrete evidence of Chairman Cho's involvement is confirmed, the prosecution is expected to exercise its right to request prosecution. The Fair Trade Commission holds exclusive prosecution rights for violations of the Fair Trade Act.

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