Youngone Group promised to prevent a recurrence, telling employees it felt "heavy-hearted for causing concern" after the group's owner was reported to prosecutors over omitted affiliate data.

According to the industry on the 27th, Youngone Group said in an intranet notice the previous day, "We will overhaul our internal systems, expand human and physical resources, and, through continuous training, build our capabilities so that similar cases do not recur, taking proactive measures."

Eum Jandi, head of the Corporate Group Management Division at the Korea Fair Trade Commission, gives a briefing at the Government Complex Sejong in Sejong on the 23rd on sanctions for submitting false designation materials by Sung Ki-hak, the same person of the corporate group Youngone. /Courtesy of News1

The company said, "When we first submitted the simplified designation materials, we lacked understanding of the relevant laws and systems and did not have a dedicated team in place, so we submitted materials for only five companies, including Youngone Holdings."

It added, "In 2023, when we submitted the formal designation materials for the first time at the request of the Korea Fair Trade Commission (FTC), we, as in our prior handling, submitted data on five companies including Youngone Holdings along with the relative companies confirmed at the time. After submission, we confirmed there were more target companies and, even after the deadline, voluntarily submitted additional materials."

However, Youngone Group was later told by the Korea Fair Trade Commission (FTC) that there were additional omitted affiliates. According to the company, the omitted companies included 18 owned by the owner's maternal relatives and about 40 owned by registered executives of affiliates or nonprofit corporations.

Youngone Group said, "For a considerable number of companies, even the owner could not easily ascertain the circumstances," adding, "In most cases, the owner did not hold equity, and there was little to no relationship with the five Youngone companies in terms of transaction, investment, or debt guarantee, or the transaction scale was minimal. Accordingly, of the 82 companies flagged as omissions, 79 were excluded from the group, and the three that remained in the group are small companies with assets and sales each in the 1 billion won range."

Recently, Chairman Seong Gi-hak of Youngone Group came under prosecution investigation for failing to properly report affiliates owned by himself and his children to the Korea Fair Trade Commission (FTC) and for avoiding designation as a large conglomerate group. On the 23rd, the Korea Fair Trade Commission (FTC) said it confirmed that from 2021 to 2023, Seong omitted a total of 82 companies, including 43 owned by himself and his relatives and 39 owned by executives.

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