Fair Trade Commission fined 9.7 billion won for Cheil Construction Co., Ltd. to provide unfair support for its family-run affiliates

Cheil Engineering & Construction, which unfairly supported the construction by giving construction work to affiliates owned by the owner's family, will be fined 9.68 billion won with a correction order from the Fair Trade Commission.

The Fair Trade Commission said Cheil Engineering & Construction has given work to J.J. Engineering & Construction and J.I. Engineering & Construction, whose family owns 100% of the shares, in seven public housing development projects secured by so-called beehive bids that mobilized many affiliates or partners between 2016 and 2023.

Through joint construction with Cheil Engineering & Construction, JJ E&C and JI E&C, which did not have construction capabilities, generated construction sales of KRW 157.4 billion and KRW 84.8 billion, respectively, while construction profits reached KRW 13.8 billion and KRW 10.7 billion, respectively, according to the FTC.

The Fair Trade Commission said, "It is a case of sanctioning unfair support activities that provided excessive economic benefits to affiliates owned by the owner's family without a reasonable reason," adding, "It is meaningful that we detected unfair support activities in mid-sized companies in the blind spot of market monitoring because regulations on large business groups were not applied."

At the same time, he said he expects foul play to be eradicated in the residential building construction market, which is close to stabilizing people's housing.