Large conglomerate affiliates subject to disclosure requirements paid 138.9 billion won ($92.3 million) in subcontracting fees to partner companies after the legal deadline in the second half of last year, a Korea Fair Trade Commission probe found. Eland and Daebang Construction had relatively higher late-payment rates than other business groups.

The Fair Trade Commission announced the findings Tuesday in its review of subcontract payment condition disclosures for the second half of 2025.

The Korea Fair Trade Commission at Government Complex Sejong in Sejong [Newsis]
The Korea Fair Trade Commission at Government Complex Sejong in Sejong [Newsis]

The review covered 1,417 prime contractors belonging to 92 designated conglomerate groups, which collectively paid 89.1 trillion won in subcontracting fees during the second half of last year. Under the Fair Trade Act, prime contractors affiliated with designated conglomerate groups must disclose the scale, method and timing of subcontract payments on DART every six months.

In terms of payment timing, 66.82 percent of the total amount was paid within 15 days of the payment date, and 86.41 percent within 30 days — well ahead of the legal deadline of 60 days.

Eight conglomerate groups paid more than 70 percent of their subcontracting fees within 10 days. Eukor Car Carriers and Paradise each recorded a rate of 100 percent.

By contrast, payments made after the 60-day legal deadline totaled 138.9 billion won, or 0.16 percent of the overall amount. Eland had the highest late-payment rate at 14.02 percent, followed by Daebang Construction at 10.11 percent, SM at 5.40 percent, Kyobo Life at 2.94 percent and KG at 2.51 percent.

Hyundai Motor Company recorded the largest subcontract payment volume at 11.2 trillion won, followed by Samsung at 8.95 trillion won, HD Hyundai at 5.58 trillion won, Hanwha at 5.37 trillion won and LG Group at 4.77 trillion won.

The average cash payment rate — covering cash, checks and bill-substitute instruments with a maturity of one day or less — stood at 84.71 percent, slightly down from 86.19 percent in the same period a year earlier.

Twenty-nine conglomerate groups, including GM Korea, Hanjin, BS and Naver, recorded a cash payment rate of 100 percent, while KG (24.51 percent), Hite Jinro (26.37 percent), LS (34.36 percent) and Doosan (39.59 percent) posted comparatively lower rates.

When bill-substitute instruments with a maturity of up to 60 days were included, the cash-equivalent payment rate came to 98.35 percent.

Only 144 prime contractors across 43 conglomerate groups — 10.2 percent of the total — operated subcontract dispute mediation bodies.

Among the 19 large construction companies that signed a mutual-growth agreement with the Fair Trade Commission in late May, all but three recorded cash payment rates of 97 percent or higher.

Samsung C&T, Hyundai E&C, Posco E&C, Lotte Engineering & Construction, Hyundai Development Co, HDC I'Park and Hoban Construction each achieved 100 percent. Subcontract dispute mediation bodies were found to be in place at all of the top 10 construction companies.

The Fair Trade Commission said it expects cash payment rates and the establishment of dispute mediation bodies to expand further, given that the mutual-growth agreement was signed after the second-half data were compiled.

The review also resulted in fines against three companies that failed to fulfill their subcontract payment disclosure obligations: Voicetru and Studio One Pick, both Kakao affiliates, and Wonpol, an SK Group affiliate. Thirty-one companies with omissions or errors in their disclosures were called for corrective filings.

The Fair Trade Commission said it plans to conduct additional checks focused on whether fees and late-payment interest were properly settled, targeting companies with large volumes of overdue subcontract payments.


y2k@heraldcorp.com