Chong Kun Dang Holdings fined for violating antitrust law
By Kwak Yeon-soo
Chong Kun Dang Pharmaceutical Chairman Lee Jang-han
Chong Kun Dang Holdings was fined for violating the country's Monopoly Regulations and Fair Trade Act concerning holding companies, the Fair Trade Commission (FTC) said Monday.
The FTC said it imposed a 140 million won ($115,640) fine and issued a correction order on Chong Kun Dang Holdings for holding shares in a financial company.
It also imposed a 24 million won fine and correction order on the holding company's affiliate Bell E&C for holding stocks of domestic affiliates that do not fall under grandson companies.
According to the anti-trust authority, Chong Kun Dang Holdings was accused of owning a 56.29 percent share in CKD Venture Capital two years after the company was converted into a holding company.
In addition, Bell E&C violated the act by continuing to own 9.14 percent of CKD Venture Capital shares two years after it was converted into subsidiary.
The Fair Trade Act prohibits a holding company from holding stocks of any domestic company that runs financial or insurance businesses when it is converted into a general holding company or is incorporated as a general holding company.
Holding companies may hold the stocks of such domestic companies up to two years from the date on which it is converted into or incorporated as a general holding company.
“We will continue to monitor holding companies and take serious measures, if necessary, to enhance transparency in corporate governance,” an FTC official said. “We will also toughen rules on holding companies.”
In 2017, Chong Kun Dang Pharmaceutical Chairman Lee Jang-han faced questioning over allegations that he verbally harassed his personal drivers.
He was accused of hurling invectives at four of his drivers and forcing them to violate traffic regulations. They all quit their jobs.
Meanwhile, Chong Kun Dang Pharmaceutical completed construction of an anti-cancer drug plant in Indonesia in July, in a bid to accelerate entry into the global market.
The company invested $30 million in building the new plant, which covers about 12,588 square meters.
Indonesia is the world's fourth most populous nation, with over 250 million inhabitants, and its pharmaceutical market was worth about 7.9 trillion won in 2018. The anti-cancer drug market is growing at about 38 percent annually.