Korea Fair Trade Commission’s Suspicious Overlooking Investigation

The suspicion on Korea Fair Trade Commission (KFTC) is getting serious. The KFTC excluded Hankyoreh Living, a living information newspaper company, from the investigation list on illegal internal transaction cases committed by 13 media companies. Especially, the elucidation resource, presented by the KFTC after the reporting of the unfair investigation case, has been ascertained as false.

It has been revealed that the Newspaper Hankyoreh (NH) criticized articles by Donga Ilbo and Chosun Ilbo based on the wrong elucidation resource.

It has been confirmed yesterday that when the KFTC investigated the illegal internal transaction cases by major companies and state-run companies, they included already merged or sold subsidiary companies, and even charged fines against some mother-companies that had supported their subsidiary companies.

As the KFTC investigated the five major groups in August, 1999, they disclosed that Daewoo Motor Co. (DMC) and Daewoo Heavy Industries and Machinery Ltd. (DHIM) had aided the Pusan Daily News, a former subsidiary company of Daewoo group that was preparing for a bankruptcy report after insolvency, by prepaying an advertisement fee of 4.185 billion won.

The KRTC charged the mother companies, the DMC and the DHIM, a fine of 2.929 billion won regarding the case in October, 1999.

Disobeying the KFTC’s decision, Daewoo submitted a letter of objection that says, ``since the Pusan Daily Newspaper (BDN) was preparing for a bankruptcy report, there was no competition prevention effect. But, the KFTC rejected the appeal saying, ``the bankruptcy took place after the illegal internal transaction.``

However, the KFTC did not even investigate the Hankyoreh Living (HL) case saying, ``the Hankyoreh Living has already shut down``, and there has been no order of correction or charging of fine.

Especially, the KFTC told a lie on the elucidation resource presented on 25th saying that, ``thus far, we excluded cases in which the doers of benefactors have been already extinct or liquidated. The case of the prepaid advertisement fee for the BDN by DM and DHIM is a good example.``

Afterward, Lee Han-Uek, the director of investigation department in the KFTC, acknowledged their wrongdoing saying, ``it was an inappropriate case, because the elucidation resource was prepared so hastily.``

In the meantime, a representative of the HL met a Donga Ilbo reporter and said, ``although the KFTC and the NH named us as a closed company or an extinct company, we are still a registered periodical publication company. We don’t even know why they did not investigate us.``

Although the KFTC charged the Donga Ilbo a fine of 6.2 billion won, the largest amount, they charged the NH only 15 million won, a mere 1/413 compared to the Donga Ilbo.

Choi Young-Hae moneychoi@donga.com