Watchdog probing Hanjin's inter-affiliate transactions

The antitrust watchdog has been investigating transactions between affiliates of Hanjin Group, South Korea's 15th largest conglomerate, to figure out whether children of the group's chairman took undue profits from unfair business practices, officials said Thursday.

The investigation by the Fair Trade Commission focuses on transactions between Uniconverse, an IT service provider under Hanjin Group, and CyberSky, which operates an online duty-free shopping mall for Korean Air Co. It is the group's flagship unit and the nation's largest carrier. 

The antitrust agency suspects that group units had an exclusive deal with each other, barring other firms from doing business with them.

Hanjin Group Chairman Cho Yang-ho and his three children together hold a 100 percent stake in Uniconverse. CyberSky had been wholly owned by Cho's three children, but they sold all the stakes to Korean Air in November in response to rising criticism.

The FTC said it will hold a committee meeting in late September and decide whether to hand the case over to the prosecution after hearing explanations from company officials.

Korean Air said the transactions between the two subsidiaries conducted from 2009-2016 are worth billions of won, and Cho's children sold all stakes in CyberSky to Korean Air to resolve the legal issues. 

"We are preparing reports to clarify the issue, while it has not yet been confirmed whether the FTC will bring the matter to prosecutors," a Korean Air official said.

Under the antitrust regulations, affiliates of business groups with assets exceeding 5 trillion won ($4.54 billion) are barred from having excessive transactions between themselves. Corporate critics have criticized such exclusive deals among subsidiaries for increasing the wealth of controlling family members and stifling fair competition. (Yonhap)