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ESG Weekly Review | South Korea ESG Controversies for August 12-18, 2024

ESG Weekly Review | South Korea ESG Controversies for August 12-18, 2024

ESG Weekly Review | South Korea ESG Controversies for August 12-18, 2024

ESG Weekly Review | South Korea ESG Controversies for August 12-18, 2024

FairLabs Team

2024. 8. 19.

Weekly ESG Controversies (August 12~18)


Key Takeaways


  • SAMSUNG BIOLOGICS’ Court Victory: A significant court ruling has overturned all sanctions imposed by financial authorities in 2018 on SAMSUNG BIOLOGICS regarding alleged fraudulent accounting practices, marking a crucial legal win for the company after six years of litigation.


  • SAMBU CONSTRUCTION’s Audit Scandal: SAMBU CONSTRUCTION faces a trading suspension after the Financial Supervisory Service rejected its audit opinion, implicating the company in stock manipulation activities.


  • WOORI FINANCIAL GROUP’s Control Lapses: WOORI FINANCIAL GROUP is under intense scrutiny as its internal control mechanisms are questioned following a series of financial scandals, including fraudulent loans linked to the chairman’s relatives.


  • CJ FRESHWAY’s Labor Violation Fine: CJ FRESHWAY has been fined 24.5 billion KRW by the Fair Trade Commission for engaging in unfair labor practices that disadvantaged small businesses.


  • KAKAOPAY’s Data Privacy Breach: KAKAOPAY is being investigated for allegedly disclosing the personal credit information of over 40 million users to Alipay without proper consent, raising alarms over customer privacy across the financial industry.




  1. Business Ethics (18.17%)

    • The recent court decision favoring SAMSUNG BIOLOGICS by nullifying the 2018 sanctions highlights the ongoing challenges in balancing corporate governance with legal accountability.

    • Similarly, the legal struggles of Seo Jung-jin, Chairman of CELLTRION, who filed a police complaint for alleged blackmail, underscores the complex personal and ethical dimensions that can impact business leadership.




  1. Labor Practices (13.43%)

    • The substantial fine imposed on CJ FRESHWAY for unfair labor practices reflects growing regulatory vigilance.

    • Meanwhile, GS RETAIL’s acquittal in a subcontractor abuse case demonstrates the legal complexities surrounding labor rights in large corporations.




  1. Customer Privacy (13.34%)

    • KAKAOPAY’s unauthorized sharing of customer data with Alipay is a stark reminder of the importance of stringent data privacy practices. This incident has triggered broader investigations into similar practices by Naver and Toss, underlining the systemic risks associated with inadequate data governance.




  1. Competitive Behavior:

    • The competitive dynamics within the food services industry came under scrutiny as CJ FRESHWAY was penalized for allegedly using a joint venture to sideline local small businesses.

    • Additionally, the Supreme Court’s partial reversal of a fine on LS Group affiliates signals ongoing legal debates around anti-competitive practices.




  1. Systemic Risk Management (12.44%)

    • The fallout from KAKAOPAY’s privacy breach has rippled across the industry, leading to increased regulatory attention on other tech firms.

    • Concurrently, concerns over WOORI FINANCIAL GROUP’s internal controls emphasize the need for robust governance frameworks to mitigate systemic risks.




This week’s ESG analysis highlights the critical importance of proactive risk management in maintaining corporate integrity and long-term sustainability. The protracted legal battle faced by SAMSUNG BIOLOGICS and the ongoing price-fixing case involving StarKist, a DONGWON INDUSTRIES subsidiary, illustrate how unresolved controversies can severely impact a company’s operations and reputation over time.

Equally significant are emerging risks like the recent challenges faced by SAMBU CONSTRUCTION and KAKAOPAY. These incidents reveal the vulnerabilities that can quickly escalate into major threats if not addressed promptly. Moreover, the broader industry implications of individual controversies, such as those stemming from KAKAOPAY’s data breach, highlight the interconnected nature of risks in today’s business environment.


Disclaimer: This content was made with the help of AI. It may contain errors or inaccuracies, and should not be relied upon as a substitute for professional advice. The information contained in this article is not investment advice. FairLabs does not endorse or recommend any investments and assumes no liability for any consequence relating directly or indirectly to any action or inaction taken based on the information contained in this article.

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Reach Us

FAIR LABS CO., LTD.

83 Uisadang-daero, Yeongdeungpo-gu, Seoul

team@fairlabs.io

Copyright 2024. All Rights Reserved.

Reach Us

FAIR LABS CO., LTD.

83 Uisadang-daero, Yeongdeungpo-gu, Seoul

team@fairlabs.io

Copyright 2024. All Rights Reserved.