Samsung Elec, affiliates fined $207 mln over cafeteria contracts

Samsung Electro-Mechanics

24/06/2021 08:38

SEOUL, June 24 (Reuters) - Samsung Electronics  005930.KS 
and four affiliates have been fined 234.9 billion won ($207
million) for giving affiliate Samsung Welstory in-house
cafeteria contracts since 2013 and ensuring a high profit
margin, the Korea Fair Trade Commission (KFTC) watchdog said on
Thursday. 
    Samsung Electronics said in a statement that there was no
unfair support, the company strove to provide quality meals for
its staff, and that it plans to show that the contracts were
normal transactions by disputing the KFTC's decision in
administrative litigation after review.  
    Samsung Welstory, a meal provider for cafeterias, is wholly
owned by Samsung C&T  028260.KS , of which Samsung Electronics
vice chairman Jay Y. Lee held a 18.1% stake as of May.  
    KFTC said in a statement that Samsung Electronics and
affiliates unfairly supported Samsung Welstory by entering into
private contracts with it since 2013, without opening up the
cafeteria operations to competition from other providers and on
terms favouring Welstory. 
    The terms included guaranteeing Welstory's margins on food
material costs, payment of fees, and automatic reflection of
inflation and wage increase rates, the KFTC said. 
    ($1 = 1,134.1700 won)

 (Reporting by Joyce Lee; editing by Jason Neely)
 ((jungyoon.lee@tr.com; +82 2 6936 1467;))