Fair Trade Commission raids firm linked to ex-presidential aide's children over alleged illicit support

The Korea Fair Trade Commission has launched a probe into whether a chicken supply business owned by Hong Cheol-ho, former chief of political affairs at the presidential office, was improperly transferred to a company owned by his children. Hong co-founded Gupnae Chicken with his younger brother, Hong Gyeong-ho, who serves as chairman of the franchise.

According to Yonhap, the Fair Trade Commission conducted an on-site inspection of chicken supplier Krecchico on Wednesday and Thursday.

Krecchico supplies chicken to the Gupnae Chicken franchise headed by Chairman Hong Gyeong-ho. The three children of former aide Hong Cheol-ho — the chairman's nephews and nieces — hold 100 percent of the company.

The commission is examining whether the 2021 transfer of the chicken supply business from a company owned by Hong Cheol-ho to Krecchico constitutes illicit support under fair trade law.

Regulators believe there are grounds to consider the transfer a violation — specifically, that handing over a chicken supply business with a stable client in Gupnae Chicken to his children's company without compensation may qualify as unlawful support through the provision of a business opportunity under the Fair Trade Act.

Meanwhile, the National Tax Service earlier audited Krecchico and levied more than 1 billion won ($751,000) in taxes, including gift taxes, on Hong Cheol-ho's family.

Hong's side has contested the assessment, filing an appeal with the Tax Tribunal on the grounds that the imposition was unlawful.