[Edaily Reporter kim mi-kyung ] The CEOs of CJ CheilJedang Corp(097950)and Samyang Corporation(145990), which were sanctioned by the Fair Trade Commission for price-fixing of food raw materials, appeared in person at the parliamentary audit hearing to apologize to the public. Although intense questioning was initially expected, the session concluded relatively quickly as both CEOs acknowledged responsibility for the price-fixing and expressed their commitment to preventing a recurrence.

On the 7th, Kim Chan-ho, CEO of CJ CheilJedang Corp., and Lee Woon-ik, CEO of Samyang Corporation, appeared as witnesses at the National Assembly’s Agriculture, Food, Rural Affairs, Oceans and Fisheries Committee hearing on the Ministry of Agriculture, Food and Rural Affairs. Although Vice President Cho Young-sik of CJ CheilJedang Corp. had originally been selected as a witness, CEO Kim appeared in person and bowed his head in apology.

During the questioning that day, Rep. Yoon Jun-byeong of the Democratic Party of Korea demanded that the two CEOs clarify their positions regarding the collusion scandal. Rep. Yoon rebuked Minister Song Mi-ryeong of the Ministry of Agriculture, Food and Rural Affairs, stating, “We cannot afford to simply leave this matter to the Fair Trade Commission and stand idly by,” and added, “The Ministry must conduct a thorough investigation into its failure to supervise the companies involved in the collusion and establish a system to prevent such incidents from recurring in the future.” Rep. Yoon then asked CEOs Kim and Lee, “Please take this opportunity to express your position to the public.”

CEO Kim, who took the microphone first, bowed his head and apologized. Kim Chan-ho, CEO of CJ CheilJedang Corp., began by saying, “On behalf of the company, I bow my head and apologize to the public for undermining the order of fair competition and failing to meet the expectations of the market and our customers.”

CEO Kim then explained that, to prevent a recurrence, the company is completely blocking contact with competitors and strengthening internal controls. He stated, “Taking this incident as an opportunity, we are comprehensively reviewing our corporate systems and culture and correcting them from the ground up,” adding, “We have withdrawn from the association (TS) to completely block contact with competitors, and even when meetings with competitors are unavoidable, we are strictly managing them through pre- and post-meeting reporting processes.”

He also noted that the company is strengthening training to prevent recurrence. CEO Kim emphasized, “We are taking strong disciplinary action against executives and employees involved in collusion and are taking preemptive measures through our internal leniency program (a system offering leniency to voluntary whistleblowers),” adding, “We will strive to ensure that TS, as a leading food company in South Korea, once again becomes a pioneer in compliance management and fair trade.”

Lee Woon-ik, CEO of Samyang Corporation, also expressed his apology, saying, “I am truly sorry that we failed to uphold the trust placed in us, even though we are a company that receives support from the government and the National Assembly.” CEO Lee stated, “We are firmly establishing an irreversible internal control system to ensure that such incidents never occur again,” and added, “By clearly defining employee responsibilities in our service regulations and employment rules, we will transform into a company that is once again loved and trusted.”

No further questions were raised following the two CEOs’ apologies and explanations of measures to prevent recurrence. With Representative Yoon’s questioning concluded, the two CEOs finished their testimony and left the hearing. Although intense scrutiny of the two companies regarding the food raw materials price-fixing issue had initially been anticipated, the questioning effectively concluded with the CEOs’ voluntary attendance and their strong commitment to reform.

Previously, the Fair Trade Commission imposed sanctions this year on companies that had engaged in long-term price-fixing in the markets for food raw materials such as sugar, flour, and starch and starch syrup. The total fines imposed on all relevant companies exceeded 2 trillion won, including 396 billion won for sugar, 671 billion won for flour, and 747.6 billion won for starch and starch syrup.