Samsung Electronics expressed strong regret over the Fair Trade Commission (FTC)'s conclusion that it had driven its in-house cafeteria business to Samsung Welstory, the Korea's largest cafeteria service provider.
The FTC announced on June 24 that it imposed penalties of 234.92 billion won ($207 million), the largest amount ever in Korea, on Samsung Electronics, Samsung Display, Samsung Electro-Mechanics, Samsung SDI, and Samsung Welstory for for unfair intra-group support that had benefited Samsung’s family owners.
"It is regrettable that management activities for the welfare of executives and employees have been misled as unfair support," Samsung Electronics issued a statement on the FTC's sanctions and said. "Facts and legal judgments were unilateral and the contents deliberated at the plenary session were not properly reflected."
"Samsung Group has driven all of its in-house cafeteria business to Samsung Welstory, a family company of Vice Chairman Lee Jae-yong," the FTC said. "The contract method is so advantageous to Samsung Welstory that it cannot be found in other industries."
"Samsung Welstory was active in dividend payout based on stable cash flow from intra-group trading, playing a cash cow role for Samsung’s family owners," the FTC added.
"There was no unfair support order," Samsung Electronics said. "At that time, what the management mentioned was to 'provide the best meal, improve the quality of the meal, and make sure there have to be no complaints from employees. As a company, Samsung has done its best to provide quality meals."
"Samsung will review the contents and will take a legal action to clarify that Samsung Welstory transactions had been made on fair and normal commercial terms," Samsung Electronics added.
"The FTC rejected the voluntary remedial measures of Samsung Welstory, but we will continue to open meals under way," the company said. "We will take a closer look at the related systems in the future and take extra care not to get such misunderstandings again."
Some in the industry point out that the FTC's sanctions on Samsung are too excessive.
