South Korea’s corporate watchdog said Wednesday that it has decided to sue Samsung Electronics Chairman Lee Kun-hee as the country’s largest conglomerate deliberately failed to submit related documents regarding affiliates to the authorities.
According to the Fair Trade Commission, Samsung Group omitted two firms effectively under its wings from the list of its affiliates to the corporate watchdog in 2014.
The country’s major business groups had been under tight mutual investment and loan guarantee restrictions because of their sprawling expansion and cobweblike ownership structure.
Under South Korean fair trade law, affiliates of large conglomerates with assets exceeding 10 trillion won (US$9.36 billion) are restricted from making equity investments in their affiliated companies or offering loan guarantees to each other.
The conglomerates are also required to make public major management decisions regarding their non-listed affiliates and are barred from engaging in excessive trading among affiliates.
The FTC said the two firms — Samoo Architecture & Engineer and its sister firm Seoyoung — have been effectively controlled by Samsung Group and have been engaged in a business relationship with the group’s affiliates, which means that the two firms should have been added to the group’s list of affiliates.
Chairman Lee has been hospitalized since suffering a heart attack in 2014, and his only son, Jae-yong, is at the forefront of the group’s management. (Yonhap)