Firms warned over unfair business with subcontractors

The Fair Trade Commission on Monday issued warnings against Lotte Engineering and Construction and LS Cable and System for unfair business practices with subcontractors.

In January 2009, Lotte delayed writing a contract for six months even after its subcontracting company started construction work. It made the payment worth 3.6 billion won ($3.2 million) 18 months later.

LS cut the contract prices 5 percent when it made a contract with a wire-packing company in 2009, saying it would increase orders 17 percent compared to the previous year. However, the company decreased the amount of orders 17 percent, causing a loss of 31 million won for the subcontractor.

Considering that the two companies have already solved the issues following previous orders, the antitrust regulator said it gave warnings without other disciplinary action.

The state-run antitrust watchdog said it would take actions against another 10 cases it has investigated for violating antitrust laws since the second half of last year.

Thus far, a total of 16 companies have been detected and they have been ordered to offer 1.92 billion won to subcontractors. The total amount of fines was worth 118 million won.

By Lee Ji-yoon (jylee@heraldcorp.com)