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FTC reports Naver to prosecutors for violating anti-trust laws

Naver HQ in Bundang Gyeonngi Province. Korea Times file
Naver HQ in Bundang Gyeonngi Province. Korea Times file

By Kim Hyun-bin

The Fair Trade Commission (FTC) has reported Lee Hae-jin, global investment officer (GIO) and founder of Naver, to the prosecution for allegedly violating the country's anti-trust laws, the anti-trust overseer said Sunday.
Naver Chairman Lee Hae-jin
Naver Chairman Lee Hae-jin

The FTC claimed that Lee deliberately withheld information regarding 20 of Naver's affiliate companies in 2015, as well as eight affiliates owned by company executives in both 2017 and 2018.

Under FTC rules, any firm with over 5 trillion won ($4.2 billion) worth of assets is obliged to disclose information annually on the status of affiliates, shareholders, relatives, executives stakes and financial records, to assist in the monitoring of unfair practices.

The FTC said that in 2015, Lee had sought to deliberately omit key records for Zium, which he owns completely, and Hwaeum, in which his cousin has a 50 percent stake. Both companies are affiliates of Naver.

Naver holds 50 percent stakes in YTN Plus and Line Friends which were also omitted along with 16 other affiliate companies owned by company executives.

"There were the GIO's signature on both the label and on the confirmation documents on the submitted files, so we deemed he was aware of the situation FTC said.

According to the financial overseer, ahead of the disclosures, Lee attended several executive meetings and was regularly briefed on the companies' affairs. "Even the company that Lee has a 100 percent stake in as well as the company owned by a relative were not disclosed," the FTC said claiming it was hard to believe Lee was oblivious to the situation.

In addition, the FTC gave a warning to Lee for failing to disclose information on eight affiliate companies in both 2017 and 2018.

If found guilty, Lee could be fined up to 100 million won.

Regarding the FTC's decision, Naver said the omissions were not intentional but occurred in the process of reviewing and submitting documents to the FTC.

Naver HQ in Bundang Gyeonngi Province. Korea Times file
Naver HQ in Bundang Gyeonngi Province. Korea Times file

By Kim Hyun-bin

The Fair Trade Commission (FTC) has reported Lee Hae-jin, global investment officer (GIO) and founder of Naver, to the prosecution for allegedly violating the country's anti-trust laws, the anti-trust overseer said Sunday.
Naver Chairman Lee Hae-jin
Naver Chairman Lee Hae-jin

The FTC claimed that Lee deliberately withheld information regarding 20 of Naver's affiliate companies in 2015, as well as eight affiliates owned by company executives in both 2017 and 2018.

Under FTC rules, any firm with over 5 trillion won ($4.2 billion) worth of assets is obliged to disclose information annually on the status of affiliates, shareholders, relatives, executives stakes and financial records, to assist in the monitoring of unfair practices.

The FTC said that in 2015, Lee had sought to deliberately omit key records for Zium, which he owns completely, and Hwaeum, in which his cousin has a 50 percent stake. Both companies are affiliates of Naver.

Naver holds 50 percent stakes in YTN Plus and Line Friends which were also omitted along with 16 other affiliate companies owned by company executives.

"There were the GIO's signature on both the label and on the confirmation documents on the submitted files, so we deemed he was aware of the situation FTC said.

According to the financial overseer, ahead of the disclosures, Lee attended several executive meetings and was regularly briefed on the companies' affairs. "Even the company that Lee has a 100 percent stake in as well as the company owned by a relative were not disclosed," the FTC said claiming it was hard to believe Lee was oblivious to the situation.

In addition, the FTC gave a warning to Lee for failing to disclose information on eight affiliate companies in both 2017 and 2018.

If found guilty, Lee could be fined up to 100 million won.

Regarding the FTC's decision, Naver said the omissions were not intentional but occurred in the process of reviewing and submitting documents to the FTC.

Kim Hyun-bin hyunbin@koreatimes.co.kr


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