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Practice Area|Antitrust & Competition

Corporations and Inside Trading

The KFTC has adopted various regulations to address the issues of concentration of economic power to business groups. In particular, the KFTC established the Bureau of Business group to effectively deal with concentration of economic power, creating five divisions (Business group Policy Division, Holding Company Division, Disclosure Inspection Division, Internal Transaction Surveillance Division, and Unfair Support Surveillance Division) thereunder to tighten regulation on business group. Jipyong’s Antitrust & Competition Team renders legal service on full spectrum related to business group, such as designation/disclosure of large-scale business groups, including the designation of new business groups subject to disclosure (disclosure on 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 guarantee.

Provision of funds, assets, labor, goods, and services to other companies including affiliates can be deemed as unfair support in favor of the other (unfair internal transactions). To prevent unfair internal transaction, comparison with usual prices and demonstration of unjustness of allegation are required, and it may cause controversies in the future along with the tightening regulations of internal transaction. Since internal transactions between affiliates are not illegal, a close examination through regular monitoring and management system is required before commencing transaction in order to avoid investigation or sanction by the regulatory authorities for unfair internal transactions (unfair support activities). Jipyong’s Antitrust & Competition Team has provided comprehensive advice on internal transactions based on extensive experience in the course of inspection and response to the KFTC and litigation. We endeavor to pre-emptively respond to tightened KFTC regulation on internal transaction.

Key Practice Areas Close

    • Preparation for and response to new designation of large business group
    • Consultation on disclosure of large business groups
    • Consultation on establishment and conversion of holding company
    • Application for independent management of relatives and executives
    • Addition to and exclusion from affiliates
    • Consultation on restriction on mutual investment and debt guarantee
    • Internal investigation and audit on unfair internal transactions (Unfair support)
    • Responding to KFTC’s decisions on internal transactions
    • Representation of an administrative litigation (Cancellation of disposition of fines and corrective orders) related to internal transactions

Experiences Close

    • Responded to the restrictions on the alleged private profit-taking behaviors by SK group and the SK Group family members.
    • Represented Eugene Group in connection with designation of the Group as a conglomerate subject to corporate disclosure
    • Represented Hanwha Group in connection with restrictions on insider trading
    • Represented NH Nonghyup Financial Group Inc. in a case related to a false report of the holding company’s current status of holding of stocks (secured a disposition of “warning” without a sanction for the case including criminal prosecution)
    • Represented NH Nonghyup Financial Group Inc. in a criminal case related to  a false report of the holding company’s current status of holding of stocks (secured a non-prosecution decision from the prosecutors)
    • Represented Daou Kiwoom Group in connection with designation of the Group as a conglomerate subject to corporate disclosure
    • Represented Hanil Holdings Co., Ltd. in connection with the group’s conversion to the holding company system pursuant to the Fair Trade Law
    • Represented a CEO of a company in a criminal case related to his omission of filing of documents designated to be filed by conglomerate and won an acquittal (affirmed by the Supreme Court)
    • Represented an affiliate to Hanwha Group in connection with its response to the KFTA's inspection related to alleged unfair support to the affiliate
    • Represented an affiliate to SPC Group in connection with prosecutors’ investigation and administrative proceedings related to alleged unfair support to the affiliate
    • Preparation for and response designation of large business group subjected to disclosure
    • Advised “N” and “M” Groups on addition to and exclusion from affiliates
    • Advised on “H” and “K” companies’ conversion into holding company
    • Inspection on internal transaction of “S”, “E” and “K” groups and conducted lawsuits