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Practice Area|Antitrust & Competition

Corporations and Inside Trading

The KFTC has adopted various regulations for business groups to address the issues of concentration of economic power. In particular, the KFTC established the Bureau of Business Group to effectively deal with the concentration of economic power, creating five divisions (the Business Group Policy Division; the Holding Company Division; the Disclosure Inspection Division; the Internal Transaction Surveillance Division; and the Unfair Support Surveillance Division) to tighten their regulation of business groups. Jipyong’s Antitrust & Competition Group provides a comprehensive suite of legal services, including the designation and disclosure of large-scale business groups such as the designation of new business groups subject to disclosure (disclosure of current status, board of directors resolution and prior disclosure on large-scale internal transactions, disclosure of important matters for unlisted companies); recognition of independent management; transfer and exclusion of affiliates; reporting and conversion of holding companies; and restriction on mutual investment and debt guarantees.

Provision of funds, assets, labor, goods, and services to other companies, including affiliates, can be deemed as unfair support of others (unfair internal transactions). To prevent a finding of unfair internal transactions, a comparison with normal pricing and proving unjustness of the allegation are required, and the strengthened regulations of internal transactions may increase contentious subject matter. Since internal transactions between affiliates are not illegal, a close examination through regular monitoring and systems management are required before commencing transactions in order to avoid investigations or sanctions by the regulatory authorities for unfair internal transactions (unfair support activities). Jipyong’s Antitrust & Competition Group provides comprehensive advice on internal transactions based on their extensive KFTC experience.

Key Practice Areas Close

    • New designation of large business groups
    • Disclosure of large business groups
    • Establishment and conversion of a holding company
    • Independent management of relatives and executives
    • Reports of inclusion in, or exclusion from, affiliates
    • Restrictions on cross shareholding and debt guarantees
    • Internal investigations and examination of insider trading (e.g., unfairly assisting a related party, unfairly providing benefit to a related party, etc.)
    • KFTC decisions on internal transactions
    • Administrative litigation (cancellation of disposition of fines and corrective orders) related to internal transactions

Experience Close

    • Represented Corporate Group ‘S’ in defending against the KFTC’s investigation on the regulation of corporate groups subject to limitations on cross shareholding
    • Advised STIC Investment on the non-designation of corporate groups subject to disclosure
    • Represented SK Group in connection with the KFTC’s investigation and administrative proceedings related to restrictions on alleged private profit-taking behaviors of SK Group
    • Represented Hanwha Group in connection with restrictions on insider trading
    • Represented SPC Group in connection with the prosecutors’ investigation and administrative proceedings related to alleged unfair support to its affiliate
    • Represented Eugene Group in connection with designating the group as a conglomerate subject to corporate disclosure
    • Represented Daou Kiwoom Group in connection with designating the group as a conglomerate subject to corporate disclosure
    • Represented NH Nonghyup Financial Group in a case related to a false report of the holding company’s status of shareholding
    • Represented Hanil Holdings in connection with converting the group into a holding company