Daelim fined 735 mil. won for unfair subcontracting practices

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Daelim fined 735 mil. won for unfair subcontracting practices

By Baek Byung-yeul

Lee Hae-wook, chairman of Daelim Group
Korea's antitrust agency has imposed a 735 million won ($608,194) fine on Daelim Industrial for violation of a subcontracting law as the construction company made a late payment and didn't pay its subcontractors the penalty interest.

The Fair Trade Commission (FTC) said Sunday that it imposed a correction order and the fine on Daelim over unfair subcontracting practices that damaged 759 subcontractors, adding that the amount of damage is 1.49 billion won.

The FTC had investigated Daelim since April 2018 after the agency received reports from multiple business operators that it violated the subcontracting law. Upon investigation, Daelim was found to have violated the law in 2,897 cases over the past three years between April 2015 and April 2018.

The violation cases accounted for about 7 percent to 9 percent of the company's subcontracts, given the company made about between 30,000 and 40,000 contracts with its subcontractors during the period.

According to the antitrust agency, Daelim didn't issue a subcontract agreement for its 36 subcontractors or wrote the contract after its subcontractors began construction work. For its 338 subcontractors, the company didn't specify the payment method or price adjustment in the contracts.

By making a late payment to its subcontractors, Daelim also didn't pay penalty interest fees worth 115 million won.

In response to the imposition of fines, Daelim said it "paid the unpaid fees to its subcontractors and reformed its electronic contract system to prevent potential late payments."


By Baek Byung-yeul

Lee Hae-wook, chairman of Daelim Group
Korea's antitrust agency has imposed a 735 million won ($608,194) fine on Daelim Industrial for violation of a subcontracting law as the construction company made a late payment and didn't pay its subcontractors the penalty interest.

The Fair Trade Commission (FTC) said Sunday that it imposed a correction order and the fine on Daelim over unfair subcontracting practices that damaged 759 subcontractors, adding that the amount of damage is 1.49 billion won.

The FTC had investigated Daelim since April 2018 after the agency received reports from multiple business operators that it violated the subcontracting law. Upon investigation, Daelim was found to have violated the law in 2,897 cases over the past three years between April 2015 and April 2018.

The violation cases accounted for about 7 percent to 9 percent of the company's subcontracts, given the company made about between 30,000 and 40,000 contracts with its subcontractors during the period.

According to the antitrust agency, Daelim didn't issue a subcontract agreement for its 36 subcontractors or wrote the contract after its subcontractors began construction work. For its 338 subcontractors, the company didn't specify the payment method or price adjustment in the contracts.

By making a late payment to its subcontractors, Daelim also didn't pay penalty interest fees worth 115 million won.

In response to the imposition of fines, Daelim said it "paid the unpaid fees to its subcontractors and reformed its electronic contract system to prevent potential late payments."


Baek Byung-yeul baekby@koreatimes.co.kr


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