In the first half of last year, the payment amount for subcontracting by large corporations approached 90 trillion won. The cash payment ratio reached 85%. Most subcontracting payments were made within the legal period of 30 days, but a high percentage of payments exceeded the legal payment period of 60 days among corporations such as Korea & Company Group, E-Land, and Samchuly.

The Fair Trade Commission announced on the 5th the results of the '2024 first half subcontract payment condition disclosure inspection.'

A view of the Government Complex Sejong where the Fair Trade Commission is located. /Courtesy of News1

According to the Fair Trade Act, companies that are part of the disclosure target corporate groups and correspond to primary contractors must disclose information such as subcontract payment amounts and related dispute resolution bodies quarterly through the electronic disclosure system. Accordingly, in the first half of last year, 1,396 businesses belonging to 88 corporate groups disclosed their subcontract payment conditions.

According to the disclosure content, the total payment amount for subcontracting in the first half of last year was 87 trillion won. Samsung had the highest amount at 12.3 trillion won, followed by Hyundai Motor Company (11.4 trillion won), HD Hyundai (6.2 trillion won), and LG (4.9 trillion won).

The average cash payment ratio for these companies was 85.24%. Cash payments include ▲ cash and checks ▲ bills and alternative payment methods maturing within 1 day, among others. The ratio of 'cash equivalents' including alternative payment methods maturing within 60 days was 98.19%. The cash payment ratio for 27 groups, including MDM Group, KRAFTON, and BGF, was 100%. In contrast, DN (8.48%), HiteJinro (22.60%), and LS (32.29%) had low cash payment ratios.

The percentage of subcontract payments made beyond the legal payment period of 60 days was 0.14%. The payment ratios exceeding 60 days were high among corporate groups such as Korea & Company Group (12.88%), E-Land (5.13%), and Samchuly (4.16%). The percentage of subcontract payments made within 15 days was 69.15%, and the percentage made within 30 days was 87.79%.

There were 120 businesses operating dispute resolution bodies related to subcontracting, accounting for 8.5% of the total.

The Fair Trade Commission imposed fines ranging from 250,000 to 800,000 won on 12 businesses, including Creation Music Rights (Kakao) and STM (Samsung), for 'delayed disclosure' of related content beyond the specified period.