Daewoong Pharmaceutical violated subsidiary conduct restrictions and received a corrective order from the Fair Trade Commission.
On the 25th, the Fair Trade Commission said Daewoong Pharmaceutical violated the subsidiary conduct restrictions under the Monopoly Regulation and Fair Trade Act and ordered measures to prevent a recurrence.
Under the Fair Trade Act, a subsidiary of a general holding company must own at least 40% of the total number of shares issued by a grandchild company. However, Daewoong Pharmaceutical, while being a subsidiary of Daewoong and a grandchild company holder, owned only 37.78% of Apicell Therapeutics' shares for nine months (Dec. 2023–Sep. 2024).
It was not until Sep. 6 last year that Daewoong Pharmaceutical corrected the violation by raising its equity in Apicell Therapeutics to 40.14% through a paid-in capital increase.
The Fair Trade Commission said, "This action is significant in that it detected and sanctioned a violation of the conduct restrictions that undermined the purpose of the holding company system under the Fair Trade Act," adding, "We will continue to monitor violations of the conduct restrictions so that excessive expansion of control is curbed and a transparent ownership structure can be maintained."