▲ Hanwha
The Korea Fair Trade Commission (KFTC) is reportedly investigating whether there were unfair internal transactions within Hanwha Group regarding brand royalty payments between its affiliates.
According to industry sources, the KFTC began on-site investigations on Tuesday (June 23) at multiple affiliates, including Hanwha, the group's de facto holding company, as well as Hanwha Solutions, Hanwha Life, and Hanwha General Insurance.
The investigation is expected to last for about a week.
It is reported that the KFTC is examining whether these internal brand royalty transactions were used to unfairly support affiliates or to facilitate the appropriation of corporate profits by the owner family.
Hanwha affiliates have been paying brand royalties to Hanwha under licensing agreements.
These royalties are calculated by applying a specific rate to revenue after deducting expenses such as advertising costs.
The KFTC is reportedly reviewing whether the calculation method for these royalties properly reflects the characteristics of each industry and the actual benefits derived from using the brand.
While it is a standard business practice for a holding company to receive brand usage fees from its affiliates, the difficulty in accurately valuing trademark rights creates the potential for abuse. Such transactions can be used as a means to unfairly transfer profits from affiliates to a holding company where the owner family holds a significant stake.
An official from the KFTC stated, "We cannot confirm details regarding individual cases."
(Photo: Yonhap News)
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