Gov’t to announce new duty-free operators next weekend

South Korea’s customs agency said Thursday that it plans to announce the winners of duty-free operating licenses next weekend in a bid to prevent people from taking advantage of tip-offs as the stock market will be closed.

Four companies Shinsegae, Doosan Group, SK Group and Lotte Group have submitted bids for the operational licenses of three duty-free stores in downtown Seoul, which are set to expire later this year. Shinsegae and Fashion Group Hyungji are competing for a license for a duty-free store in Busan, the country’s southern port city.

The Korea Customs Service (KCS) said it will release the list on Nov. 14 after a two-day review by the 15-member panel.

It chose next Saturday in order to prevent possible insider stock trading, which has embroiled the KCS since July.

The KCS had picked Hanwha Group to be the operator of a new duty-free shop in downtown Seoul on July 10, but shares of Hanwha Galleria Timeworld Co., the group’s retail unit, spiked by the daily limit from the beginning of the day, before the KCS made its announcement after the market closed.

The Financial Services Commission, the country’s financial market governing body, has launched an investigation into whether a KCS official tipped off Hanwha Group about the KCS decision.

Competition for duty-free licenses has been heating up in South Korea as the business has emerged as a new cash cow in the retail industry.

Last year, the six duty-free stores across the capital, mostly dominated by Lotte, posted combined sales of 4.4 trillion won ($3.9 billion). Sales by Lotte Duty Free’s Myeongdong branch accounted for a whopping 45 percent of the total.

SOURCE: THE KOREA TIMES

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