Fair Trade – South Korea Reviews Restaurant Chain’s Affiliate Loan Practices
Fair Trade – South Korea’s Fair Trade Commission has begun formal deliberations into Myeong Ryun Dang, the operator of the Myeong Ryun Junsa Pork Ribs restaurant chain, over allegations that it channelled low-interest funding to affiliated lending businesses through money raised under state-backed financing programmes.
Watchdog reviews examiner findings
The competition regulator said its examiners had concluded that the company may have provided unfair economic support to 14 credit-related affiliates between December 2021 and April 2026. The support allegedly took the form of loans issued at interest rates substantially below market levels.
According to the Fair Trade Commission, Myeong Ryun Dang used funds obtained through policy financing from the Korea Development Bank to provide loans of up to 10 billion won, or about $6.5 million, to each affiliated business. The affiliates then reportedly extended those funds to restaurant outlets.
Newly created affiliates received cheaper funding
The 14 companies involved were relatively new and had faced challenges obtaining financing independently, the regulator said. They received loans from Myeong Ryun Dang at an interest rate of about 4.6 percent, which the watchdog described as favourable compared with ordinary borrowing conditions.
The regulator estimated that the financing arrangements gave the affiliated businesses economic advantages worth roughly 21.7 billion won. The findings were included in an examiners’ report submitted for review by the commission.
Possible sanctions under fair trade rules
The report described the alleged conduct as a serious breach of South Korea’s fair trade regulations. It recommended corrective measures, financial penalties and complaints against the companies and individuals considered responsible.
The deliberation process does not represent a final ruling. The commission will review the evidence and responses from the parties before deciding whether to impose sanctions or take other action.
Myeong Ryun Dang operates a nationwide Korean barbecue franchise known for pork rib dishes. The case adds to broader regulatory attention on transactions between companies and their affiliates, particularly where internal financing may provide benefits that are not available to outside businesses.
Coupang case resolved through voluntary measures
In a separate development, the Fair Trade Commission recently accepted voluntary corrective proposals worth 3 billion won, or about $1.94 million, from e-commerce company Coupang and its private-label subsidiary, Coupang Private Label Brands.
The approval followed an investigation into the companies’ dealings with subcontractors. Coupang and CPLB sought a consent decree, a process that allows a case to be settled without further legal proceedings if the regulator accepts proposed remedies.
Subcontractor agreements under review
The watchdog said 314 subcontractors had been given contracts that did not contain information required by law. It also found that supply prices for 94 subcontractors had been reduced during promotional discount events, despite those reductions not being included in the original agreements.
The corrective package is intended to address the issues identified during the investigation and improve contract practices involving suppliers. The Fair Trade Commission has continued to focus on protecting smaller businesses in commercial relationships with larger companies.
The two cases underline the regulator’s wider effort to examine corporate conduct involving affiliate support, supplier contracts and the distribution of financial benefits within business groups. Decisions in the Myeong Ryun Dang matter are expected after the commission completes its deliberations.