Nonghyup vs. FTC

Farmer’s cooperative files suit against anti-trust regulator

By Park Si-soo

The country’s largest federation for farmers has filed a suit against the anti-trust regulator, demanding the regulator lift a ban hampering its free investment and other financial transactions.

The National Agricultural Cooperative Federation, otherwise known as Nonghyup, said Thursday it had filed a suit against the Fair Trade Commission (FTC) with the Seoul High Court. This comes one month after the FTC prohibited Nonghyup and its affiliates from making equity investments in or offering loan guarantees to one another.

Conglomerates with assets of 5 trillion won ($4.25 billion) or more, including Samsung, LG and Hyundai among others, are subject to the restriction aimed at preventing the distortion of conglomerate governance structures.

As of April 12, Nonghyup had assets of 8.6 trillion won. Nonghyup’s assets jumped sharply early this year after the government invested 5 trillion won into it.

The FTC’s decision is equivalent to a provincial court’s ruling, which means Nonghyup must take the case to an appellate court to overturn it.

Nonghyup counters it should be given an exemption from the restriction, highlighting its activities meant to improve the livelihood of farmers. “We have been struggling with a variety of disadvantages caused by the restriction imposed on April 12,” a Nonghyup official said. “Apart from the suit, we are seeking a court injunction to minimize the side effects of the measure.”

The official complained that the FTC’s decision has put the federation at a great disadvantage in tax benefits and subsidies among others. “Under the restriction, we can no longer receive state funds with which Nonghyup has helped cash-strapped farmers and livestock breeders,” he said.

The federation also faces the risk of losing some 20 billion won since the regulation mandates it to sell its stakes in private equity funds, he added.