Fair Trade Commission: "Naver's Lee Hae-jin omitted himself and relatives' affiliates to avoid being designated as the head of the group"

Lee Hae-jin, Naver Global Chief Investment Officer (GIO). (Photo by 자료)

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[Sejong=Asia Economy Reporter Joo Sang-don] The Fair Trade Commission (FTC) has decided to file a complaint with the prosecution against Lee Hae-jin, Global Investment Officer (GIO) of Naver. This is due to Lee Hae-jin's intentional omission of 20 affiliated companies, including his own and those of his relatives, in the designated data submission.

The FTC announced on the 16th that at the first subcommittee meeting held on the 7th, it decided to file a complaint and issue a warning regarding Lee Hae-jin's false submission of designated data as the same person of Naver.

In 2015, the FTC took legal action against Lee Hae-jin, the same person of the Naver business group, for omitting 20 affiliated companies including his own company (Jieum) and a relative's company (Hwaeum) from the designated data. For the omission of eight affiliated companies held by executives of nonprofit organizations in 2017 and 2018, the FTC issued warnings. Naver was first designated as a publicly disclosed business group in 2017.

According to the FTC, Lee Hae-jin GIO omitted Jieum, a company wholly owned by him as the same person, from the designated data in 2015. He also omitted Hwaeum, a company in which a fourth-degree relative holds 50% of the shares. Additionally, Naver directly invested in companies (YT N Plus, Line Friends) and 16 companies held by executives of nonprofit organizations established with 100% investment from Naver were omitted from the designated data.

The FTC believes that Lee Hae-jin GIO intentionally omitted these companies when submitting the designated data. An FTC official said, "According to the internally gathered information, Lee Hae-jin, as the same person, was aware that he had to submit not only his own company but also the status of relative companies," adding, "There was an awareness to avoid being recognized as the same person Lee Hae-jin, and this influenced the omission of his own and relative companies."

Furthermore, the fact that the same person affixed his personal seal on the cover and confirmation of the designated data was also seen as evidence that he was aware of the submission. The FTC stated that since it is not difficult to determine whether the omitted companies, wholly owned by him or closely held by relatives, are affiliated companies, the affixing of the personal seal indicates that Lee Hae-jin GIO was aware. According to the FTC, the same person attended the temporary general meeting of his own company just before submitting the designated data and regularly received reports on the company's operations.

Accordingly, the FTC decided to apply Article 14, Paragraph 4 and Article 68, Item 4 of the old law to the 2015 act and file a complaint against Lee Hae-jin GIO with the prosecution.

However, regarding the omission of companies held by executives of nonprofit organizations in 2017 and 2018, the FTC decided to issue a warning considering that some executives did not disclose companies they indirectly held despite efforts to identify them. Previously, the FTC also issued a warning to Kim Beom-su, Chairman of the Kakao Board, for omitting indirectly held companies by executives of affiliated companies.

Naver's position is that it was a "clerk's mistake." A Naver official said, "At the time in 2015, the clerk did not know whether companies of Lee Hae-jin GIO himself and his relatives had to be submitted, which caused this issue," and added, "We will fully explain this during the prosecution investigation."

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