‘Omission of Affiliate Company Status’ Park Moon-duk, Chairman of HiteJinro, Fined 100 Million Won

[Asia Economy Reporter Moon Hyewon]The first trial court issued a summary order imposing a fine of 100 million won on Park Mundeok, chairman of HiteJinro, who is accused of omitting affiliates owned by the family of the group head when reporting corporate status to the Fair Trade Commission.

According to the legal community on the 18th, Judge Lee Donghee of the Criminal Division 2 at the Seoul Central District Court issued a summary order imposing a fine of 100 million won on Chairman Park, who was summarily indicted on charges of violating the Fair Trade Act on the 13th. A summary order is a simplified criminal procedure that imposes fines or other penalties through written examination without a formal trial process when the charges are relatively minor.

Chairman Park is accused of submitting false information by omitting details about six affiliates and seven relatives in materials submitted to the Fair Trade Commission five times from April 2017 to April 2020 for the designation of a mutual shareholding restricted business group.

The Fair Trade Commission designates business groups with total assets of 5 trillion won or more as publicly disclosed business groups and those with 10 trillion won or more as mutual shareholding restricted business groups every May. To designate these groups, the procedure involves receiving reports of companies owned by special related persons such as relatives of the group head who control the business group as affiliates.

According to the Fair Trade Commission's investigation, HiteJinro submitted corporate status materials omitting six companies: 'Yeonam', 'Songjeong', 'Daewoo Chemical', 'Daewoo Package', 'Daewoo Combine', and 'Pyeongam Agricultural Corporation'. Yeonam and Songjeong are owned by Chairman Park's nephews, while the other three companies are private companies wholly owned by Chairman Park's distant cousin, his son, and grandson.

Earlier, in June last year, the Fair Trade Commission reported Chairman Park to the prosecution, stating, "He was aware of the omission of affiliates and reviewed the degree of punishment if the violation was detected, but continued to conceal it."

After conducting investigations of the accuser and related parties, the prosecution summarily indicted Chairman Park with a fine of 100 million won.