FTC to probe E-Mart on bribery allegations
By Rachel Lee
The Fair Trade Commission (FTC) has launched an investigation into allegations that its own officials took bribes from E-Mart in exchange for overlooking shady inter-affiliate transactions.
The move comes after the recent leak of confidential documents from Shinsegae Group, the parent company of the discount chain operator, that included E-Mart’s bribing of officials of the anti-trust watchdog.
“The FTC has begun investigating the company over the allegations as it has been accused of illegal lobbying many times before,” an FTC spokesman told The Korea Times, declining to elaborate further.
According to the documents, E-Mart offered gifts to officials who were responsible for overseeing its Seoul headquarters and stores in 13 cities including Busan, Daegu and Gwangju between August 2011 and January 2012.
The investigation comes amid escalating prosecution probes into allegations of Shinsegae Group’s illegal inter-affiliate transactions and monitoring of unionized workers.
Group Vice Chairman Chung Yong-jin was summoned Feb. 5 for questioning over the inter-affiliate trading. This came after a civic group filed a complaint against Chung and two other executives of E-mart last October for alleged breach of trust.
The complaint followed the FTC imposing a 4-billion won fine on Shinsegae and E-mart, saying the two companies applied lower sales commission rates than legally permitted for the in-house bakery chain, Shinsegae SVN, when allowing it to operate at their stores nationwide. This form of “financial aid” totaled 6.2 billion won.
In the meantime, the group said Wednesday that Chung and two other Shinsegae board members will resign their seats next month. It said that it has been considering their resignation since 2011, and the decision had “nothing to do with the recent investigations.”
Market sources, however, suspect the decision was made so that Chung can step back and be released from responsibility.
The ongoing investigations of Shinsegae demonstrate a toughening stance by the government and law enforcement authorities on crimes and ethical violations committed by chaebol owners and their offspring.