Fair Trade Commission Chairman "Will Review Appropriateness of Up to 60-Day Settlement Deadline for Homeplus, etc." (Comprehensive)

Han Ki-jung, Chairman of the Fair Trade Commission, is giving a briefing on urgent issues at the Financial Supervisory Authorities during the Emergency Inquiry held by the National Assembly's Political Affairs Committee on the 18th. Photo by Kim Hyun-min

Han Ki-jung, Chairman of the Fair Trade Commission, stated regarding the Homeplus incident, "We will review the appropriateness of the settlement period for large offline retailers, which is up to 60 days."

On the 18th, at the National Assembly's Legislation and Judiciary Committee plenary session, Chairman Han said, "To prevent recurrence, we will examine whether the current payment deadline under the Large-scale Distribution Business Act is appropriate and prepare measures to improve the system."

According to the relevant law, the settlement period for large retailers such as Homeplus is within 40 days from the sales closing date for special purchase agreements and within 60 days from the product receipt date for direct purchases.

Chairman Han stated, "Currently, payments to suppliers and tenants are in a situation where they can be made normally."

Following an emergency on-site inspection by the Fair Trade Commission on the 13th, it was found that Homeplus's commercial debts incurred in January amounted to 379.1 billion KRW, of which 87%, or 332.2 billion KRW, had been paid.

However, as concerns grew over whether payments would be properly made due to the sudden initiation of rehabilitation procedures, voices emerged calling for shortening the settlement period for offline transactions as well, similar to the proposed amendment to shorten the payment period for online intermediary transaction operators to prevent recurrence.

Regarding allegations of Homeplus's abuse of power, such as 'One Plus One' promotions targeting small and medium suppliers, Rep. Lee Heon-seung of the People Power Party pointed out the issue, and Chairman Han responded, "We will verify whether there are any illegal facts."

He added, "The Fair Trade Commission is closely monitoring the payment status to suppliers and tenants as well as consumer damage and complaint trends," and said, "Going forward, we will prioritize preventing damage to small business owners and conduct weekly checks on daily payment statuses."

He also stated, "If non-payment occurs, we will take timely measures such as payment orders."

Regarding gift certificates sold by Homeplus, Chairman Han said, "Since the start of the rehabilitation procedure, there have been consumer refund requests amounting to about 1 billion KRW, and it has been confirmed that full refunds were made," adding, "We will continue to monitor related situations and actively respond with measures such as refund orders if legal violations occur."

In response to Rep. Kang Myung-gu of the People Power Party's criticism that the root cause of the Homeplus incident is excessive regulation on large marts such as mandatory closing days, Chairman Han said, "I agree on the need to ease regulations," and added, "The Fair Trade Commission also recommended easing regulations on online delivery restrictions outside business hours."

When Rep. Kim Nam-geun of the Democratic Party pointed out illegal elements in Homeplus's so-called 'Imdae-eul' transactions (a method of charging rent linked to product sales) with small merchants, Chairman Han replied, "We will review the facts and investigate if necessary."

Rep. Kim pointed out that unlike transactions with large corporations, Homeplus receives the full sales amount from small merchants, holds it for about 30 to 60 days, and then returns it after deducting rent and other fees, but the situation has changed due to the rehabilitation process.

Although there is an obligation to pay the full sales amount in advance, Rep. Kim argued that since Homeplus's creditworthiness has declined, small merchants can refuse payment under the Civil Act's 'defense of insecurity' clause.

He added that Homeplus's insistence on full payment despite this constitutes an abuse of superior bargaining position and requires investigation.

Chairman Han said, "Fundamentally, we will consider improving the Imdae-eul system so that sales amounts can be identified and received without having to collect sales proceeds first."