Korea's FTC to impose sanctions against SK Group over chairman's plunder allegations

South Korea’s third largest conglomerate SK Group may be fined by the country’s antitrust authority on charges of favoritism for Chairman Chey Tae-won over the 2017 buyout of LG Siltron.

The Fair Trade Commission (FTC) launched a probe in 2018 at a complaint filed by a civic group, accusing the group and its chair of fraudulent practice during the acquisition of LG Group’s silicon wafers manufacturing unit in 2017, now renamed SK Siltron.

According to multiple sources from the industry on Monday, the FTC is likely to send a draft of its finding in the first half.

In January 2017, SK Group took over a controlling 51 percent stake in LG Siltron for 620 billion won ($552.88 million). Months later, SK purchased a 19.6 percent stake of the remaining 49 percent, while the other 29.4 percent went to Chey.

The sticky point is whether Chey’s share was legitimate or whether SK relinquished its share to allow Chey ownership.

The FTC could stop with a fine instead of taking the issue further to the prosecution.

SK explained that Chey bought his share through fair auction and not to capitalize on the group buyout opportunity.

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