Court orders FTC to cancel SPC’s $48 mil. fine
The Seoul High Court ordered the Fair Trade Commission (FTC) to cancel a 64.7 billion won ($48.6 million) fine, which was levied against SPC Group, the country’s biggest bakery company, ruling that the antitrust agency’s decision was made without sufficient evidence, according to court officials, Thursday.
The court dismissed the FTC’s decision that SPC had allegedly carried out illegal business activities to increase the market size of Samlip, its bakery subsidiary, and leverage the effect to smooth the transition of its managerial leadership within the group’s owner family, lawyers representing the company said.
The ruling upturned the FTC’s decision against the company that was made in July 2020. Paris Croissant, SPL, BR Korea, Samlip and Shany, the group’s subsidiaries, filed an administrative suit in November that year.
An SPC official said following the court’s decision that the ruling straightened out facts and resolved what had been misunderstood.
The FTC, ahead of handing down the penalty decision in 2020, said that the group mobilized its subsidiaries to concentrate its business support on Samlip, the only listed company among the group’s subsidiaries. The agency said that the group did this to support SPC Chairman Huh Young-in’s leadership transition to his two sons.
The agency said that the group, under Huh’s directive, carried out illegal business activities to increase Samlip’s profit by 41.4 billion won from 2011 to 2019.
The agency also alleged the group ordered its three bakery subsidiaries to purchase pastry products made by its raw material subsidiaries through Samlip and pay the brand a “passage fee.”
SPC said upon the outcome of the FTC’s inspection that the allegedly illegal business activities were part of its fully legal practices under its vertical integration strategy to maximize efficiency concerning the group’s market control.
The group’s legal representative, upon hearing the court’s ruling, said that the dispute’s main issue was whether the passage fee and the sale of Mildawon’s stock were illegal and that the court ruled there was no illegality in those practices.