Watchdog to slap fines totaling 14.8 bln won on Korean barbecue chain operator

South Korea's Fair Trade Commission (FTC) has levied a substantial 14.8 billion-won ($10.8 million) fine on Myeong Ryun Dang, the operator behind the popular Korean barbecue restaurant chain. The punitive action stems from the company's provision of excessively favorable financial terms to affiliated private moneylenders. Myeong Ryun Dang granted these lenders a collective 298.3 billion won in loans, all at markedly low interest rates of 2.3% or 4.6% between December 2021 and April 2026.

The total economic benefits accruing to the private moneylenders were estimated at 21.7 billion won, while they in turn provided low-interest loans to franchisees at an average rate of 12-18%. What's more, the FTC discovered that the company's moneylenders were effectively owned by the chain's owner, meaning the financial gains ultimately benefitted the owner's family.

The watchdog has also imposed a separate 10.4 billion-won penalty on Myeong Ryun Dang for concealing its relationships with the moneylenders to potential franchisees.