SK fined for ownership of financial unit

The Fair Trade Commission said Monday that it has imposed 5.08 billion won ($4.59 million) in fines on SK Group for violating a law banning a holding company from possessing a financial unit.

Under the current antitrust law, a holding company with 100 billion won or more in assets is not allowed to own a financial affiliate.

When SK turned into a holding company in March 2007, the group’s trading arm SK Networks should have dumped its 22.7 percent share of SK Securities, its “daughter company.”

SK had been resisting acceptance the requirement, citing the pending revision to the related law, which allows the ownership of a financial subsidiary.

However, the revision, submitted to the National Assembly in 2008, has been stalled amid criticisms that the government is favoring conglomerates.

As the grace period of four years ended in February, the antitrust regulator decided to order the group to sell off its shares at SK Securities within a year as well as pay the lump sum fines.

“We will continue to monitor companies that violate the law during a grace period and respond strictly to illegal cases,” said Chung Joong-won, director general of competition policy at the FTC.

Except for SK, there are some conglomerates that own a financial company such as CJ, Doosan and Kolon.

SK Group was said to have heaved a sigh of relief because the amount of fines was much lower than expected and plan to focus on disposal of shares.

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