"I'll give you cash. Please give me a discount". Subcontracting power...Frontech Penalty KRW 79 Million

The Fair Trade Commission said it will impose a correction order and a fine of 79 million won on Frontech, a bolt and nut manufacturer, for violating the subcontracting law.

Frontech is accused of unfairly reducing 3.85% of its total monthly payments, instead of paying in cash, while entrusting subcontractors to manufacture automotive parts, including nuts, between April 2020 and January 2023.

In the first half of last year, Frontech belatedly paid 116 million won, the full amount of the unfair reduction, to the subcontractors, but the FTC ordered 11.8 million won in delayed interest under the subcontracting law, applying an annual interest rate of 15.5%.

Frontech is also accused of not writing a basic contract with a subcontractor at all or writing a basic contract without legal entries and registered seals.

"We will continue to make efforts to correct unfair practices against small suppliers through strict law enforcement and to establish a fair subcontracting order," a FTC official said.