Fair Trade Commission in Sejong City. [Photo by Yu Dae-gil]
South Korea's fair trade authorities have initiated an investigation into SM Group for allegedly providing unfair benefits to the family of its chairman, Woo Oh-hyun. The investigation focuses on claims that the group offered lucrative business opportunities to HN E&C, owned by Woo's daughter, Woo Ji-hyun, and provided low-interest loans to Samra Midas, in which his son, Woo Gi-won, holds shares.
On June 22, the Fair Trade Commission (FTC) announced that it has sent a report detailing the alleged unfair profit provision by six affiliates of SM Group to the accused parties, marking the start of formal proceedings. The FTC had previously sent reports regarding the business opportunity provision and funding support on November 13 of last year and May 27 of this year, respectively.
The six affiliates under investigation include SMAMC Investment, Samhwan Corporation, SM Shipping, SM High Plus, HN E&C, and Samra Midas. HN E&C is fully owned by Woo Ji-hyun, while Woo Oh-hyun holds a 74% stake in Samra Midas, with his son owning the remaining 26%.
FTC investigators concluded that SMAMC Investment and Samhwan Corporation directed a business opportunity for an apartment development project in Cheonan to HN E&C. As a result, HN E&C reportedly secured sales revenue of 128.3 billion won and a profit of 36.5 billion won.
An FTC official stated, "SMAMC Investment sold the apartment development site to HN E&C in December 2022, then canceled the sale in April of the following year, opting for a competitive bidding process, but ended up selling it at a lower price. Given the expected sales revenue, this constitutes a provision of business opportunities."
Additionally, SM Group affiliates are also accused of providing unfair financial support to HN E&C. Investigators found that SM Shipping and SM High Plus lent HN E&C 1.75 billion won at rates lower than the market average, thereby providing undue benefits to Woo Ji-hyun.
Furthermore, unfair financial support was also identified for Samra Midas, with SM Shipping reportedly lending 16.4 billion won to the company at a rate below the normal market rate. The total estimated amount of unfair benefits provided is approximately 18.2 billion won (1.75 billion won to HN E&C and 16.4 billion won to Samra Midas).
The FTC plans to hold a plenary meeting within this year to determine the fines for the SM Group affiliates. Analysts suggest that the total fines, excluding any aggravating or mitigating factors, could reach up to 40 billion won.
On June 22, the Fair Trade Commission (FTC) announced that it has sent a report detailing the alleged unfair profit provision by six affiliates of SM Group to the accused parties, marking the start of formal proceedings. The FTC had previously sent reports regarding the business opportunity provision and funding support on November 13 of last year and May 27 of this year, respectively.
The six affiliates under investigation include SMAMC Investment, Samhwan Corporation, SM Shipping, SM High Plus, HN E&C, and Samra Midas. HN E&C is fully owned by Woo Ji-hyun, while Woo Oh-hyun holds a 74% stake in Samra Midas, with his son owning the remaining 26%.
FTC investigators concluded that SMAMC Investment and Samhwan Corporation directed a business opportunity for an apartment development project in Cheonan to HN E&C. As a result, HN E&C reportedly secured sales revenue of 128.3 billion won and a profit of 36.5 billion won.
An FTC official stated, "SMAMC Investment sold the apartment development site to HN E&C in December 2022, then canceled the sale in April of the following year, opting for a competitive bidding process, but ended up selling it at a lower price. Given the expected sales revenue, this constitutes a provision of business opportunities."
Additionally, SM Group affiliates are also accused of providing unfair financial support to HN E&C. Investigators found that SM Shipping and SM High Plus lent HN E&C 1.75 billion won at rates lower than the market average, thereby providing undue benefits to Woo Ji-hyun.
Furthermore, unfair financial support was also identified for Samra Midas, with SM Shipping reportedly lending 16.4 billion won to the company at a rate below the normal market rate. The total estimated amount of unfair benefits provided is approximately 18.2 billion won (1.75 billion won to HN E&C and 16.4 billion won to Samra Midas).
The FTC plans to hold a plenary meeting within this year to determine the fines for the SM Group affiliates. Analysts suggest that the total fines, excluding any aggravating or mitigating factors, could reach up to 40 billion won.
* This article has been translated by AI.
Copyright ⓒ Aju Press All rights reserved.