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Samsung Life faces probe for improperly benefitting affiliate
The country's top antitrust regulator Korea Fair Trade Commission (KFTC) could probe Samsung Life Insurance for violating shareholder regulations in allegedly providing improper benefits to another affiliate.
It is currently facing punitive measures by financial authorities on the same allegation.
The KFTC said it received filings by a local civic group Solidarity for Economic Reform last week and is considering whether to open a probe into Samsung Life Insurance for allegedly providing improper benefits to another affiliate.
It is alleged that Samsung's life insurance unit exempted the IT service provider Samsung SDS from paying indemnities for failing to complete a 156 billion won project on time.
In a 156.1 billion won contract that Samsung Life signed with Samsung SDS in 2015, the latter is required to set up an enterprise resource planning (ERP) system to manage business processes by April 2017.
The project was not completed until October 2017.
Samsung Life subsequently failed to file 15 billion won in indemnities against Samsung SDS for the delay.
Financial authorities determined that Samsung's life insurance affiliate, which owns stakes in Samsung SDS, decided to sustain losses for the latter’s benefit.
This is seen as a possible violation of regulations that limit transactions by major shareholders.
In December 2020, the FSS decided to sanction Samsung Life for the move, in addition to other issues concerning insurance payments.