Court Orders Cancellation of Fair Trade Commission's 64.7 Billion Won Fine on SPC

Seoul High Court Cancels 64.7 Billion Won Fine
Recognizes Partial Illegality in Flour Transactions

A court ruling has been issued stating that the Fair Trade Commission's order to impose a fine of 64.7 billion KRW on SPC Group for unfairly supporting its affiliates must be canceled.

SPC Group logo. [Image source=SPC]

The Seoul High Court Administrative Division 6-2 (Presiding Judges Hong Seong-wook, Hwang Ui-dong, and Wi Gwang-ha) on the 31st partially ruled in favor of the plaintiffs in the lawsuit filed by five SPC Group companies against the Fair Trade Commission, seeking cancellation of the fine imposition and corrective orders.

The court ordered the cancellation of the decisions related to toll fees, low-price transfer of Milda One shares, low-price transfer of Shani sales networks, and free provision of trademark rights. Through this ruling, the entire 64.7 billion KRW fine imposed by the Fair Trade Commission was canceled.

However, the court acknowledged some violations regarding flour transactions and maintained the corrective orders related to them.

Earlier, in July 2020, the Fair Trade Commission imposed corrective orders and a fine of 64.7 billion KRW, alleging that the SPC Group's head was involved in unfairly supporting SPC Samlip through internal transactions among group affiliates.

The Fair Trade Commission found that SPC, under the involvement of the head of the group, had unfairly supported Samlip within the group from April 2011 to April 2019, funneling a total benefit worth approximately 41.4 billion KRW to Samlip.

The Fair Trade Commission judged that there was an intention to raise the stock price of Samlip, the only listed company within the group, to maintain the controlling family's dominance and to succeed management rights. SPC Group filed an administrative lawsuit in November 2020, claiming that the Fair Trade Commission's decision was unfair.

Appeals against the Fair Trade Commission's decisions are conducted through a two-tier system involving the Seoul High Court and the Supreme Court.

Meanwhile, SPC stated after the verdict, "It is fortunate that the facts have been clarified and most misunderstandings resolved," adding, "We will review the judgment and decide on our response plan."