Harim Group affiliates have been fined 4,888 million won for unfairly supporting the company’s ‘All-pum’, the son of the head of the group. In response, Harim Group said, “It is regrettable that excessive sanctions were imposed despite sufficient explanations.”
The Fair Trade Commission (Chairman Seongwook Seong-wook) announced on the 27th that it has decided to impose a fine of 4,888 million won along with a corrective order for acts of affiliates of Harim, which are affiliated with the corporate group, for unfairly supporting the product and providing unfair benefits to the product. .
According to the Fair Trade Commission, in January 2012, Harim Group Chairman Kim Hong-guk gifted his eldest son Jun-young a 100% stake in Somebet Sales Korea (name changed to All-pum in March 2013), which is at the peak of the group’s governance structure. It was found that the chairman and the group headquarters provided excessive economic benefits to the product.
From January 2012 to February 2017, five affiliated pig farms, including Farmsco, Farmsco Bioint, Folkland, Sunjinhanmaeul, and Daesung Livestock, changed their animal drug purchase method from individual purchases of previous affiliated farms to integrated purchases only through all products. Until now, he purchased veterinary medicines at high prices from All-Pum.
In addition, the affiliated feed companies Sunjin, Jeil Feed, and Farmsco changed the purchasing method of functional feed additives from the previous purchase of each company to integrated purchasing through All products, and from February 2012 to February 2017, to receive about 3% of the purchase price as an intermediate margin.
At the same time, Jeil Holdings (name changed to Harim Holdings in July 2018) became the former owner of the company in January 2013. 100% of All-Pum stocks were sold to Somebet Korea at a low price.
The Fair Trade Commission said, “Through the three acts of high-priced purchase, toll transaction, and low-priced stock sale, Olpoom received 7 billion won in support. “It has raised concerns about creating a market concentration that strengthens the business position of the product regardless of ownership concentration and its competitiveness,” he said.
At the same time, the Fair Trade Commission said, “Allpum not only secures the internal market of affiliates stably, but also sets sales targets for Korea Thumbt products for each key agency based on the negotiating power strengthened with the support of affiliates, and, subject to the achievement of the target, “By using a strategy that guarantees high margins, we have increased the external market sales of our products.”
Such actions made it difficult for distributors to distribute products from competing manufacturers and created a blockade effect that entices agencies to trade only authentic products, resulting in the effect of affiliates’ supportive actions being transferred to the antibacterial and antibiotic market, the main product of Somebet Korea. opinion
Accordingly, the Fair Trade Commission issued a corrective order and issued a correction order, and the main supporters were Farmsco 515 million won, Farmsco Bioint 749 million won, Daesung Livestock 159 million won, Folkland 50 million won, Sunjin Hanmaeul 352 million won, Sunjin 112 million won, Jeil It was decided to impose a fine of 4.8 billion won, including 247 million won for feed, 1.625 billion won for Harim Holdings, and 1.79 billion won for the support object.
Regarding the decision of the Fair Trade Commission, Harim Group said, “It is very regrettable that excessive sanctions were imposed even though it was sufficiently explained that there was no undue support for the product during the investigation and deliberation process.”
It is the position that the reasons for sanctions such as unfair support to raise funds for succession and the exploitation of private interests were not accepted even though they were sufficiently explained during the investigation and deliberation process.
Harim Group said, “The fact that affiliates had never supported the products dominated by the second generation of the same person, rather, improved management efficiency and obtained more profits through integrated purchase, etc., and that the transaction price was a normal price determined through negotiations between the parties The fact that the valuation of NS Shopping (unlisted at the time) owned by Allpoom was a legitimate evaluation according to the Gift and Gift Act was clearly explained through objective data and factual proof. We will review this and proceed with the next procedure for the disposition.”
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