Why did the FTC decide to file a complaint with the Hanwha Solutions prosecution?

Hanwha Solutions “I regret that the Fair Trade Commission has concluded that despite candid clarification based on factual legal review, it is unfair support. I will explain in future court proceedings that the transaction is legal.

The Fair Trade Commission imposed a fine of KRW 15.687 billion on Hanwha Solutions and KRW 7.28 billion on Han Express, along with a corrective order for the actions of Hanwha Group’s Hanwha Solutions, Inc. for unfair support of Hanwha Solutions, Inc He announced on the 8th that he had decided to file a complaint with the Prosecutor’s Office.

Hanwha Solutions, a company that changed its name from the former Hanwha Chemical, is a flagship subsidiary that recorded fifth place in sales (3.9 trillion won) and third place in operating profit (350 billion won) within the Hanwha Group. as of 2018. Han Express, a subsidiary of Hanwha Group, is a freight forwarder with sales of 5.434 billion won and operating profit of 8.9 billion won in 2018.

According to the findings of the Fair Trade Commission, Hanwha Solutions brought the entire export container volume worth 83 billion won to Han Express for being an affiliate, and paid a remarkably high shipping cost of 8.7 billion won. won.

In February 1999, Hanwha Solutions stopped trading with other shipping companies and unified container shipping as Han Express to bring the container volume to Han Express.

The FTC noted that “Hanwha Solutions’ unified measures are aimed at reducing transportation costs, but it is contrary to actual cost reduction and efficiency improvement, and is irrational behavior that can only be explained to further the task. Logistics”.

Hanwha Solutions also sold hydrochloric acid and caustic soda to customers directly or through agencies, as the number one company in Korea.

In particular, Hanwha Solutions added HanExpress, which does not play a substantial role in transactions with a customer through an agency, to facilitate the collection of tolls by adding Hanwha Express to the transportation transaction stage. Such support lasted for more than 10 years, and Hanwha Solutions is HanExpress It turned out that it provided an excess profit of 17.8 billion won to the company.

Jeong Jin-wook, head of the Fair Trade Commission corporate group, said, “The amount of 17.8 billion won due to Hanwha Solutions ‘unfair support reached 30.6% of Han Express’ net income, which has a clear effect of improvement of the financial structure “. It also brought with it the same impediment to fair trade, which also worsened the competitive conditions of existing transport companies.

“The FTC will continue to monitor the distorted competitive order due to unfair support activities based on non-competitive factors such as blood ties,” Jung said.

In this regard, a Hanwha Solutions official said: “I regret the fact that the FTC concluded that it was unfair support even though it made an honest statement based on a legal review based on an objective factual relationship.” .

The official added: “In addition to judicial response, we plan to improve and complement the transaction system by improving the independence and transparency of the internal transaction committee to establish a more objective and fair order of transactions in the future.”

Reporter Kim Hyun-joo [email protected]

Photo = provided by Hanwha Solutions

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