The Korea Fair Trade Commission said on the 14th that it will issue a corrective order to Kyungdong Navien and impose a 52 million won penalty surcharge for suspected violations of the Fair Transactions in Subcontracting Act.
According to a Korea Fair Trade Commission (FTC) investigation, from June 17, 2021, to June 14, 2024, Kyungdong Navien outsourced the manufacture of household heating device parts to 98 subcontractors but omitted signatures or name-and-seal imprints on unit price agreements. A unit price agreement is a document that states the supply unit price, and the prime contractor must sign or affix a name-and-seal imprint to this document and deliver it to the subcontractor. This is to prevent disadvantages to subcontractors if legal disputes arise in the future.
However, Kyungdong Navien omitted the corporate seal in the signature field of the unit price agreements. It also sent some under the name of a working-level employee without representative authority. Some unit price agreement forms had only a signature field for the subcontractor. There were 436 such unit price agreements issued in violation of the law.
The Korea Fair Trade Commission (FTC) said, "This is a case where we uncovered and sanctioned the habitual issuance of incomplete documents in subcontracting transactions," adding, "It is meaningful in that it heightened the awareness of prime contractors."