The Fair Trade Commission has confirmed that it has begun an on-site investigation into Binggrae and Haitai Ice Cream as of the 21st. This is due to suspicions that the logistics subsidiary "Jedae," wholly owned by Kim Ho-yeon, the chairman of Binggrae, had unfairly funneled work to itself.
According to the industry, the Fair Trade Commission sent researchers to Haitai and Binggrae's Gwanghwamun headquarters on that day.
The Fair Trade Commission is reportedly looking into whether there were unfair internal transactions (funneling work) in the process of changing the supply contract for the packaging materials and cone snacks for Haitai Ice Cream's main product "Buravocon" from an existing partner to Jedae.
Jedae is a logistics company with 100% equity held by Chairman Kim's three children, and it operates without manufacturing capabilities, solely handling logistics, packaging, and distribution.
After acquiring Haitai Ice Cream, Binggrae stopped transactions with the existing partner that had supplied the cone snacks and packaging materials for "Buravocon" for about 40 years and signed a contract with Jedae. If this contract was made without competitive bidding and without proper price and quality reviews, it could be deemed an unfair internal transaction.
Under the Fair Trade Act, providing unfair trading opportunities or transferring assets for a company in which the founder's family holds a certain equity (20% or more) is regarded as having a purpose of private profit taking and is subject to penalties such as penalty surcharges or criminal complaints. In this regard, the Fair Trade Commission stated, "We cannot comment on ongoing cases."
Binggrae said, "We are faithfully engaging with the Fair Trade Commission investigation."