The Korea Fair Trade Commission said on the 23rd that it will file a criminal complaint with prosecutors against Chairman Sung Ki-hak of the Youngone group on suspicion of violating the Fair Trade Act. The same person (owner) of corporations must submit corporate data (designation data) to the government to be assessed for designation as a large business group (public disclosure target business group). If the aggregate asset amount, including all affiliated companies, exceeds 5 trillion won, it is designated as a large business group and becomes subject to corresponding regulations. The Korea Fair Trade Commission (FTC) said its investigation found that Sung submitted false designation data during this process.
According to the Korea Fair Trade Commission (FTC), while submitting data for designation as a large business group for 2021–2023, Sung omitted 69 companies in 2021, 74 in 2022, and 60 in 2023 from the list of affiliated companies. Excluding duplicates, the total came to 82 companies with an asset aggregate amount of 3.24 trillion won. This is the largest case ever among those in which the Korea Fair Trade Commission (FTC) detected false data submissions. Most of the omitted companies were ones individually owned by Sung, his daughter, his younger brother, or his nephew. Sung submitted only five core affiliates—Youngone Holdings, Youngone, Youngone Outdoor, Scott North Asia, and YMSA—as affiliated companies.
If the data had been properly submitted, the Youngone group should have been designated a large business group in 2021. But because of the false submission, the timing was pushed back to 2024. As a result, for three years the Youngone group was not subject to regulations typical of large business groups, including bans on providing undue benefits to related parties and disclosure obligations. In particular, even in 2023, when Sung donated more than 50% equity of YMSA to his second daughter, Vice Chairman Sung Rae Eun, the group was able to avoid disclosing this succession process.
The Korea Fair Trade Commission (FTC) said, "Among the omitted companies are many that could not have been unknown to be affiliates, such as companies owned by Sung, his daughter, his younger brother, and his nephew." It added, "This is the first decision to file a complaint against a same person for omitting affiliates in the simplified designation data submission process, which requests only core data such as the status of affiliates."
Regarding this, Youngone Holdings said, "There was no intentional concealment or other intent," adding, "We have improved our internal processes to prevent recurrence."