Lee Yeon-woo is a financial journalist at The Korea Times. Her wide range of reporting includes policies, macroeconomics, stock market, companies and even crypto. She is passionate about connecting the dots in Korean finance and making it easier for foreign nationals to understand. Based on her previous experience as a national reporter, she also has a keen interest in social issues within the sector, including gender equality and ESG. Your tips and insights are always appreciated. You can send them to yanu@koreatimes.co.kr.
Court upholds FTC penalty on Mirae Asset
The headquarters of Mirae Asset Financial Group in central Seoul / Courtesy of Mirae Asset Financial Group
By Lee Yeon-woo
By Lee Yeon-woo
The Fair Trade Commission (FTC) has won a lawsuit filed by Mirae Asset Financial Group, which sought to overturn corrective measures and fines imposed on the company.
The country's anti-trust agency announced on Tuesday that the Seoul High Court ruled in favor of the FTC against Mirae Asset Financial Group on July 5, rejecting a claim made by Chairman Park Hyeon-joo and eight of its affiliate companies.
In September 2020, the FTC imposed fines totaling 4.4 billion won ($3.4 million) and issued corrective orders to Mirae Asset Financial Group. The commission found that the group's affiliates tried to channel business profits to Mirae Asset Consulting, the investment arm of the group.
The FTC believes that Mirae Asset Financial Group forced its affiliates to do business with Four Seasons Hotel and Blue Mountain Country Club, both of which are operated by Mirae Asset Consulting, for customer invitations and gift purchases. The FTC estimates that the amount of such internal transactions could add up to 43 billion won.
Mirae Asset Consulting is a holding company, of which Park and his family own more than 90 percent of the shares.
The group filed an appeal in December 2020 against the FTC's measures.
However, the Seoul High Court sided with the FTC, stating that the plaintiff made transactions of significant scale without rational consideration and comparison when selecting the golf club and the hotel. The court also deemed that Park is subject to the corrective orders because he could indirectly participate in various ways by leveraging his influence within the group, even if he did not directly orchestrate the transactions.
“This ruling has significant implications, as it is the first case where the FTC independently applied regulations related to conferring substantial unjust benefits without reasonable consideration or comparison to a party in a special relationship,” said an FTC official. “It is meaningful that the court has clarified the criteria for determining 'unfair favoritism' in contract-making for the first time.”
Mirae Asset Financial Group expressed regret over the decision.
“It is unfortunate that the court applied misappropriation of corporate benefits, considering the operation of the hotel and the golf club resulted in losses amounting to billions of won,” the group stated. “The group's use of the golf club or hotel was for various customer and employee events during the merger process with Daewoo Securities.”
The group will decide whether to appeal after carefully reviewing the court's ruling.