Hyosung and Hyosung Heavy Industries, which were undergoing a sanction process by the Korea Fair Trade Commission for suspected violations of the Fair Transactions in Subcontracting Act, have submitted a voluntary corrective plan. The gist is that they will provide more than 3 billion won as support funds for subcontractors. The Korea Fair Trade Commission (FTC) accepted the voluntary corrective plan and decided not to impose sanctions such as a penalty surcharge on Hyosung and Hyosung Heavy Industries.
The Korea Fair Trade Commission (FTC) said on the 4th that it finalized a consent decision related to suspected violations of the Fair Transactions in Subcontracting Act by Hyosung and Hyosung Heavy Industries. A consent decision is a system in which a company suspected of violating the law prepares its own remedy plan, and if the Korea Fair Trade Commission accepts it, the case is closed without determining whether a violation occurred.
According to the Korea Fair Trade Commission (FTC), Hyosung and Hyosung Heavy Industries demanded and kept technical data while commissioning subcontractors to manufacture electric motors. Under the Fair Transactions in Subcontracting Act, to request technical data, a written document specifying the purpose of the request and the consideration must be provided to the subcontractor. However, Hyosung and Hyosung Heavy Industries reportedly did not provide such legally required documents. The subcontractors involved in these actions by Hyosung and Hyosung Heavy Industries number 12 companies. The Korea Fair Trade Commission therefore launched an investigation to identify the precise suspected violations, but the sanction process ended when Hyosung and Hyosung Heavy Industries submitted a voluntary corrective plan. This is the first consent decision case concerning technical misappropriation.
According to the voluntary corrective plan, Hyosung and Hyosung Heavy Industries will provide 3,429.6 million won under the banner of win-win cooperation support for subcontractors. Of this, 1,129.6 million won will be used to support the development of new molds for aging dies (), parts lightweighting, and more for subcontractors whose technical data were requested by Hyosung and Hyosung Heavy Industries. In addition, to improve subcontractors' productivity, the remaining 2.3 billion won will be provided to purchase related equipment and portable air conditioners.
In addition, Hyosung and Hyosung Heavy Industries will use technical data received from subcontractors only for purposes of prior approval and post-delivery inspection. They will stop drafting or managing drawings identical to the technical data and improve their management system for concluding nondisclosure agreements.
The Korea Fair Trade Commission (FTC) said, "(Through the consent decision, Hyosung and Hyosung Heavy Industries) led to the provision of win-win funds so that subcontractors can be supported promptly," adding, "The practical benefits went to the subcontractors."