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Photo courtesy of Yonhap News |
[Alpha Biz= Paul Lee] South Korea’s antitrust watchdog has decided to refer Kim Jun-ki, founder and former chairman of DB Group, to prosecutors over allegations that the group deliberately concealed affiliated entities to evade disclosure requirements.
The Fair Trade Commission (FTC) said it uncovered evidence that DB Group intentionally omitted the Donggok Social Welfare Foundation and 15 related companies when submitting data for designation as a large business group subject to public disclosure.
According to the FTC, although the foundation and its affiliates were formally separated from DB Group in the past, they were in practice continuously used to maintain control by the founding family and pursue private interests. The regulator found that these entities were repeatedly mobilized during key moments such as financial restructuring of core DB subsidiaries, mergers and acquisitions, and efforts to defend management control.
Investigators said the foundation-related companies effectively functioned as funding vehicles, including purchasing unnecessary real estate with large loans to support DB HiTek, providing capital during DB Group’s acquisition of Daewoo Electronics, and extending substantial personal loans to Kim himself.
The FTC also concluded that DB Group systematically managed these foundation-linked firms as de facto affiliates while deliberately keeping them hidden from external disclosure. Evidence showed the creation of dedicated internal positions to oversee the entities and the removal of references to them from documents intended for external distribution.
The regulator said the findings demonstrate an organized attempt to conceal affiliated companies in violation of fair trade laws, prompting its decision to file a criminal complaint against the group’s founder.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
