South Korea's corporate watchdog conducted a probe on Tuesday over suspicions that the chief of SK Group plundered corporate profits through his purchase of a stake in its affiliate, industry insiders said.

Officials of the Fair Trade Commission (FTC) visited the company's headquarters in Seoul, and carried out investigations to secure data regarding group chairman Chey Tae-won's purchase of stakes in LG Siltron Co. last year, according to the sources.

 

In 2017, SK Holdings Co., the group's holding firm, bought a 51 percent stake in the silicon wafers manufacturing firm from LG Group, as part of effort to beef up its chipmaking sector. Silicon wafers are used as a key material for semiconductors.

Of the remaining 49 percent, SK picked up 19.6 percent months later, while 29.4 percent was acquired by Chey, which sparked questions about why SK did not purchase 100 equities in the firm though the firm is expected to show desirable performances in the future.

South Korean law prohibits the misappropriation of a firm's business entities by an official if he or she uses business opportunities to promote his, her, or a third party's interests.

Denying any wrongdoings, an SK official said, "We judged at that time that making an investment in other parts would be in the best interests of the group as a whole."

He added that Chairman Chey decided to join the bid with an aim to protect the local semiconductor market as some overseas investors had moved to buy the stake.

The FTC refused to give any official comments on the matter. (Yonhap)