CEO Kim Chan-ho appears at national audit, offers public apology

Company to overhaul compliance and fair-trade systems from the ground up

Withdraws from sugar and flour industry associations

Strengthens internal compliance training for all employees

CJ CheilJedang CEO Kim Chan-ho bows in apology during the National Assembly's Agriculture, Food, Rural Affairs, Oceans and Fisheries Committee national audit on Wednesday, in connection with price-fixing and other unfair trade practices. [Yonhap]
CJ CheilJedang CEO Kim Chan-ho bows in apology during the National Assembly's Agriculture, Food, Rural Affairs, Oceans and Fisheries Committee national audit on Wednesday, in connection with price-fixing and other unfair trade practices. [Yonhap]

CJ CheilJedang has issued a public apology over a recent food price-fixing scandal, pledging to strengthen internal controls and overhaul its compliance and fair-trade systems from scratch to prevent a recurrence.

CEO Kim Chan-ho appeared Wednesday before the National Assembly's Agriculture, Food, Rural Affairs, Oceans and Fisheries Committee national audit and said the company was "deeply sorry to the public for undermining fair competition and failing to meet the expectations of the market and our customers." He added that the company would "thoroughly review our corporate systems and culture, correct them from the ground up, and strive to become a company that leads in compliance and fair trade."

To prevent a repeat of the collusion, CJ CheilJedang said it would minimize unnecessary contact with competitors. As a first step, it has withdrawn from industry associations including the sugar and flour trade groups. The company has also reinforced internal management procedures to require pre- and post-reporting whenever business-related contact with a competitor is unavoidable.

The company also plans to overhaul its internal compliance systems. It has stepped up fair-trade and compliance training for all employees and will continue related education and inspections to prevent violations of the Fair Trade Act, including price-fixing. Employees found to have participated in collusion will face strict disciplinary action, the company said.

CJ CheilJedang said it would also operate a system to detect and proactively address fair-trade issues before they escalate. The company plans to activate internal reporting channels — including a whistleblower reward program — to identify and respond to potential violations early.

The measures signal that the company, as the industry's top player, is prepared to take full responsibility for the controversy. One industry official said the response "was clearly different from the usual practice of scrambling with defensive explanations or stopping at hollow promises."

Meanwhile, Lee Un-ik, CEO of Samyang, also appeared as a witness at Wednesday's national audit alongside Kim. Both CJ CheilJedang and Samyang were named in this year's price-fixing cases involving flour, starch syrup and sugar.

CJ CheilJedang CEO Kim Chan-ho speaks during the National Assembly's Agriculture, Food, Rural Affairs, Oceans and Fisheries Committee national audit on Wednesday, in connection with price-fixing and other unfair trade practices. [Yonhap]
CJ CheilJedang CEO Kim Chan-ho speaks during the National Assembly's Agriculture, Food, Rural Affairs, Oceans and Fisheries Committee national audit on Wednesday, in connection with price-fixing and other unfair trade practices. [Yonhap]

soho0902@heraldcorp.com