The Korea Fair Trade Commission said on the 17th it will file a complaint with prosecutors against Chung Mong-gyu, 64, chair of HDC Holdings Co., on suspicion of violating the Fair Trade Act. The Korea Fair Trade Commission (FTC) applied a violation of Article 31, Paragraph 4 of the Fair Trade Act, which stipulates the obligation of large business groups to submit data, to Chung. Violating the provision is punishable by up to two years in prison or a fine of up to 150 million won.
According to the Korea Fair Trade Commission (FTC) investigation, Chung, the "same person" (owner) of HDC Holdings Co., omitted 20 corporations that hold equity by his younger sibling and maternal uncle's families from the list of affiliated companies between 2006 and 2024. Large business groups (business groups subject to restrictions on mutual investment) like HDC Holdings Co. must submit their lists of affiliated companies to the Korea Fair Trade Commission (FTC) every year. But Chung left out 20 corporations. The total asset size of the companies omitted from the reports is said to exceed 1 trillion won. However, the Korea Fair Trade Commission (FTC) decided to file a complaint only over the data omissions that occurred from 2021 to 2024 due to the statute of limitations.
While the reporting of affiliated companies was being omitted, HDC Holdings Co. also performed building management services for "Kunsthalle," owned by Chung's maternal uncle's family. In particular, the Korea Fair Trade Commission (FTC) viewed that, given Chung had been the owner of HDC Holdings Co. since 2006 and the omitted companies belong to close relatives, he could have fully grasped the scope of affiliates.
While preparing the list of affiliated companies, Chung's secretary team was said to have received firm confirmations from the persons in charge at relatives' companies that they met the criteria for affiliates. Chung also reportedly instructed the secretary team to meet the relatives in person, even mentioning companies that could not be seen as affiliates due to the relatives' low equity ratios.
The Korea Fair Trade Commission (FTC) said, "Not only did he omit numerous companies of close relatives whose existence he could not have been unaware of, he also took no action," adding, "We filed a complaint over conduct that disregarded the legal obligation to submit designated materials."
In response, HDC Holdings Co. said it was "a simple omission in the reporting process regarding relatives' companies that have been operated independently," adding that "the same person (Chung) had no improper intent or motive to conceal anything willfully."