JIPYONG LLC

The KFTC has adopted various regulations for business groups to address the issues of concentration of economic power. In particular, the KFTC established the Bureau of Business Group to effectively deal with the concentration of economic power, creating five divisions (the Business Group Policy Division; the Holding Company Division; the Disclosure Inspection Division; the Internal Transaction Surveillance Division; and the Unfair Support Surveillance Division) to tighten their regulation of business groups. Jipyong’s Antitrust & Competition Group provides a comprehensive suite of legal services, including the designation and disclosure of large-scale business groups such as the designation of new business groups subject to disclosure (disclosure of current status, board of directors resolution and prior disclosure on large-scale internal transactions, disclosure of important matters for unlisted companies); recognition of independent management; transfer and exclusion of affiliates; reporting and conversion of holding companies; and restriction on mutual investment and debt guarantees.

Provision of funds, assets, labor, goods, and services to other companies, including affiliates, can be deemed as unfair support of others (unfair internal transactions). To prevent a finding of unfair internal transactions, a comparison with normal pricing and proving unjustness of the allegation are required, and the strengthened regulations of internal transactions may increase contentious subject matter. Since internal transactions between affiliates are not illegal, a close examination through regular monitoring and systems management are required before commencing transactions in order to avoid investigations or sanctions by the regulatory authorities for unfair internal transactions (unfair support activities). Jipyong’s Antitrust & Competition Group provides comprehensive advice on internal transactions based on their extensive KFTC experience.