FTC raids Ipark Youngchang over alleged improper support by HDC

The Korea Fair Trade Commission has launched an on-site investigation into allegations that HDC improperly supported its affiliates.

According to industry sources Friday, the Fair Trade Commission recently raided Ipark Youngchang, an HDC affiliate, to secure documents related to intra-group transactions.

Ipark Youngchang is a musical instrument manufacturing and sales company that has operated the Youngchang Piano brand. The company filed for court receivership in April after its financial difficulties deepened.

The Fair Trade Commission had previously fined HDC 17.13 billion won ($11.7 million) and referred the company to prosecutors after finding that HDC had in effect provided large-scale funding to its struggling affiliate HDC Ipark Mall at no cost.

Industry observers say the latest investigation is likely aimed at determining whether similar improper intra-group support occurred in transactions involving other affiliates. A Fair Trade Commission official declined to comment, saying the agency "cannot confirm details of individual cases."