Watchdog looking into biz groups favoring affiliates in contracts

SEOUL, Sept. 22 (Yonhap) -- South Korea's corporate watchdog said Thursday it will intensify a crackdown on the unfair business practice of large corporations favoring their affiliates when granting contracts.
In a related move, the Fair Trade Commission (FTC) said in a report to lawmakers at the annual parliamentary audit that it will analyze the types of contracts being made between 42 large conglomerates and their 1,343 affiliates. The results will be announced next month.
The watchdog added it will toughen disclosure rules and oblige companies to report to authorities whether a contract was awarded through competition or private negotiation, given that many contracts between business groups and their affiliates are inked without public bidding.
The moves come as the nation's major industrial groups are under fire for stifling competition and the growth of small- and medium-sized companies by unfairly giving contracts to their affiliates.
The government has been taking steps to curtail such business practices and the finance ministry is seeking to impose taxes on profits reaped through such deals.
The FTC said that it will also look into whether business groups violated any laws in the process of awarding large contracts to their affiliates. Making false disclosures and skipping due decision-making prosecures will be under scrutiny, it added.
kokobj@yna.co.kr
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