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Photo = Korea Fair Trade Commission |
[Alpha Biz= Kim Jisun] The Korea Fair Trade Commission (KFTC) announced on the 28th that it has imposed corrective orders and fines totaling 96 million won on auto parts companies Inpack and Inpack PM for violating the Subcontracting Act.
According to the KFTC, Inpack failed to issue required written contracts specifying inspection methods, payment schedules, and other terms when subcontracting the manufacturing of automobile component molds between April 2019 and February 2021. The company also unilaterally reduced subcontract payments by 40.69 million won without just cause, and failed to pay a principal amount of 681.11 million won along with substitute bill settlement fees (5.81 million won) and late interest (29.97 million won) despite having received the molds.
Inpack PM engaged in similar violations from January 2020 to January 2023 while subcontracting the manufacturing of automobile component assemblies. The company reduced subcontract payments by 20.88 million won without justification and withheld payment of 139.92 million won in principal and 31.96 million won in late interest, even after taking delivery of the molds. In addition, Inpack PM improperly shifted defect-related costs to subcontractors, despite having already confirmed the products as defect-free and delivering them to the ordering company.
A KFTC official stated, “This measure highlights the commission’s efforts to crack down on habitual practices such as incomplete documentation and delayed payments in the mold sector. It is intended to prevent recurrence of such unfair practices, protect subcontractors from undue disadvantages, and raise awareness among prime contractors regarding their obligation not to demand unjust economic benefits.”
Alphabiz Reporter Kim Jisun(stockmk2020@alphabiz.co.kr)
