[Alpha Biz= Kim Jisun] Gwangju, September 30 – Jungheung Construction, previously sanctioned by the Fair Trade Commission (FTC) for providing “free guarantees” in connection with a second-generation succession plan, has now been formally indicted.
The Gwangju District Prosecutors’ Office, Anti-Corruption and Organized Crime Division, announced on the 30th that Jungheung Construction was indicted on charges of violating the Fair Trade Act by unfairly supporting affiliates through capital supplementation and credit enhancements.
From July 2015 to February 2025, Jungheung Construction is alleged to have provided KRW 32 trillion (approx. USD 23 billion) in loan guarantees free of charge for housing development projects carried out by its affiliate, Jungheung Engineering & Construction (Jungheung Togeon).
Prosecutors concluded that the scheme allowed a specially related party, the largest and sole shareholder of Jungheung Togeon, to secure unjust gains.
Earlier, the FTC determined that the unfair support was carried out as part of the conglomerate owner’s succession plan for his son. The commission subsequently filed a complaint with prosecutors and imposed an administrative fine of KRW 18.02 billion (approx. USD 13 million) on Jungheung Construction.
In a statement, the Gwangju District Prosecutors’ Office declared:
“We will actively respond to anti-competitive practices that hinder fair competition or lead to economic concentration, and will do our utmost to safeguard a fair market order.”
Alphabiz Reporter Kim Jisun(stockmk2020@alphabiz.co.kr)
