Seoul, Sep 28 (IANS) South Korea’s fair trade watchdog on Monday decided to slap a 14.8 billion-won ($10.8 million) fine on the operator of a popular Korean barbecue restaurant chain for providing low-interest loans to 14 affiliated private moneylenders.
The Fair Trade Commission (FTC) said Myeong Ryun Dang, which operates Myeong Ryun Jinsa Pork Ribs, provided excessive economic benefits to the affiliates by lending them a total of 298.3 billion won at unusually low interest rates, reports Yonhap news agency.
The watchdog said Myeong Ryun Dang offered the loans at annual interest rates of 2.3 percent or 4.6 percent between December 2021 and April 2026, estimating the economic benefits received by the private moneylenders at 21.7 billion won.
The affiliates, in turn, lent the funds to franchisees at annual interest rates of 12 to 18 percent, reports Yonhap news agency.
“The 14 private moneylenders, which would have struggled to enter the market due to difficulties in raising funds independently, were each able to obtain between 10 billion won and 15 billion won in low-interest loans, reducing their costs and risks,” the FTC said.
“Myeong Ryun Dang withheld information about its ties to the moneylenders, detailed loan terms, links between franchise and loan contracts and repayment methods, all of which could have significantly influenced prospective franchisees’ decisions,” it added.
The FTC said it has decided to impose a 10.4 billion-won fine on Myeong Ryun Dang for unlawfully supporting its affiliates and a 4.4 billion-won fine for concealing its relationships with the lenders to potential franchisees.
The watchdog noted the 14 moneylenders were effectively owned by Myeong Ryun Dang’s owner, meaning the economic benefits provided to them ultimately flowed to the owner’s family.
The investigation showed the funds Myeong Ryun Dang provided to its affiliates included 79 billion won in low-interest loans from the state-run Korea Development Bank.
The FTC said it has decided to file a complaint against the company and its chairman.
—IANS
na/
