Fair Trade Commission Fines KRW 400 Million to Celltrion for 'Self-interest defraudation' by Chairman Seo Jeong-jin

Celltrion, which provided unfair profits to affiliates with a high stake in Chairman Seo Jeong-jin, will be fined 435 million won by the Fair Trade Commission along with a corrective order.

The FTC said Celltrion has allowed Chairman Seo Jung-jin to store medicines and use its trademark for Celltrion Healthcare, which is 88 percent owned by Chairman Seo Jung-jin, for 11 years since 2009.

It also said that since 2016, Chairman Suh has allowed Celltrion Skincare, which has a 69.7% stake, to use the trademark free of charge.

The FTC said it calculated a fine of about 400 million won based on this, saying that the amount of such unfair support reached 1.2 billion won from 2016 to 2019, when Celltrion Group was designated as a large business group.

The FTC said the two affiliates, which had accumulated operating profit deficits, also paid dividends to Chairman Seo Jung-jin as their financial structure improved with support from Celltrion.

The FTC said the move was the first to sanction private interest defraudation in the pharmaceutical sector, which is closely related to people's lives.

The Fair Trade Commission explained that it received tax information from the National Tax Service in 2020 and launched an ex officio investigation in July 2021.

The Fair Trade Commission said the National Tax Service has levied 2.58 billion won in storage fees provided by Celltrion for healthcare for five years from 2014, and determined that 754 million won in healthcare and 51 million won in skin care fees were not received in relation to trademark rights.