Yuhan-Kimberly, Hyundai Department in trouble for hiring ex-FTC officials.
Prosecutors are searching a number of companies as part of their investigation into allegations that former senior officials at Korea's antitrust watchdog found jobs at large companies before the period disallowing them from seeking employment at private firms expired.
While the Fair Trade Commission (FTC) is taking a hard-line approach against conglomerates in the Moon Jae-in administration, criticism is being raised not only at the companies under suspicion but also the FTC's integrity as "economic police."
According to Yuhan-Kimberly, Wednesday, prosecutors searched the sanitary products maker's office Tuesday and seized computer hard drive and other documents. The prosecutors said the move was "related to allegations of violations of the Civil Servants Ethics Act."
The prosecution has been investigating allegations that a number of former FTC senior officials have violated the act to get jobs or sign consulting contracts with large firms after quitting the watchdog.
The act stipulates retired senior officials "should not be employed within three years from the time of their retirement by any institutions closely relevant to the duties of the department or agency with which they have been affiliated for five years before their retirement."
An exemption can be made only when the retired official passes a screening at the Public Service Ethics Committee.
Regarding the prosecution's raid, however, Yuhan-Kimberly said they have no record of hiring a former FTC senior official.
"To our knowledge, there are no employees or executives who are from the FTC," a Yuhan-Kimberly official said. "What we know is the prosecution has searched our office to secure data for their investigation."
In April, the FTC dismissed charges against Yuhan-Kimberly over a sanitary pad price hike; but this drew a backlash that the FTC had justified the company's "clever trick" to set unacceptably high prices.
Last week, the prosecution also searched Hyundai Department Store, Kia Motors, Hyundai E and C and Coupang, on similar allegations. Late last month, Daelim, JW Holdings and several other companies were searched.
"We have nothing to say about the search," a Hyundai Department Store official said. "Investigators just seized documents and a hard drive, and we have not received any messages from the prosecution so far."
Pundits and lawmakers say that companies are hiring ex-FTC officials as "lobbyists" to get favorable treatment from existing FTC officials, who are also looking forward to getting such high-paid jobs after their retirement.
According to Rep. Yoo Dong-soo of the Democratic Party of Korea, 47 retired FTC officials have undergone screening by the ethics committee since 2009.
However, the committee banned only six, with the remainder going to work for large companies including Samsung, Hyundai Motor and KT.
"Also, ex-FTC officials are frequenting the FTC," Yoo said in a statement. "Twelve retired FTC officials, which is 10 percent of the total number of those retired in the past five years, have visited the FTC office more than 60 times, and one of them visited the office a whopping 115 times."