The Fair Trade Commission announced on the 30th that it has imposed a penalty surcharge of 38 million won and corrective measures on Seoyon E-Hwa due to violations of the subcontracting law.
According to the Fair Trade Commission, Seoyon E-Hwa failed to issue a total of 190 subcontract agreements within the legal deadline while commissioning mold manufacturing to nine suppliers from 2010 to 2023. There were instances where the contract was provided after the work had started, and in the most delayed case, the document was provided more than 3,000 days after the commencement date.
In this process, Seoyon E-Hwa did not issue receipt certificates for the completed molds or paid the invoices after the legal payment deadline, failing to pay approximately 366 million won in late interest and about 54.6 million won in fees for substitute payment methods.
It also appears that conditions were inserted in the subcontract that prohibited the supplier from disputing the inspection results and mandated compensation for all damages aside from delay compensation in the event of a delivery delay. The Fair Trade Commission deemed these specific provisions as unjust conditions that were unilaterally disadvantageous to the supplier.
An official from the Fair Trade Commission noted, "This action is intended to punish the commonly practiced 'pre-contract after work' and delayed payments in the mold sector," adding, "We will continuously monitor unfair subcontracting practices in the mold sector, a key foundational industry for the nation."