An act of high-pressure selling by Korea MS is becoming a controversy. While its partner requested Korea MS to take back inventories that it took as part of ‘high-pressure selling’, Korea MS rejected its request. This partner is currently facing a financial difficulty as a result.
According to industries, a company that used to be a partner of Korea MS reported Korea MS to Fair Trade Commission (FTC) for rejecting its request to take back inventories that it took as part of ‘high-pressure selling’.
This company had been a license partner (LSP) of Korea MS starting from the middle of 2000s until last year. It claims that it took on inventories worth about $803,000 from Korea MS in 2014 when Korea MS was trying to achieve its annual goal and was pressuring this company to take on some of its inventories. At that time, MS Headquarters carried out an audit on Korea MS and transferred some of its personnel.
“MS Headquarters only transferred some personnel from Korea MS and did not present any solution to its partners who had suffered financial damage due to high-pressure selling.” said a representative for this company who used to work for Korea MS. “It was trying to cover up the incident through power-trip by only preserving some of the amount from inventories and having us write statements saying that MS will not be responsible for the rest.”
This company cancelled its partnership with Korea MS last year and requested Korea MS to take back $446,000 worth of inventories. However, Korea MS repeatedly said that it would be impossible for Korea MS to take back inventories. “Korea MS is not trying to take any responsibility of dumping its inventories to its helpless partners 3 years ago.” said a representative for this company. “Due to power-trip from a global business, small and medium companies are now facing difficulties that they cannot handle.”
High-pressure selling problem was abused by global businesses to increase their sales in South Korea. Korea MS sold its supplies to this partner and reported to its headquarters by saying that it sold its supplies to a particular business. Partners have no choice but to take back inventories to extend their contracts with global businesses. This problem had become an issue when there was an incident involving Korea IBM in 2012. However, it has settled after MS Headquarters carried out an audit on Korea MS in 2015.
There is a high chance that there will be similar stories such as the one from this ex-partner of Korea MS after Korea MS changed many of its partners last year. Korea MS cancelled contracts with half of its partners to strengthen its abilities in Cloud and it has incorporated new companies as its partners. Many partners such as TechData that used to be the sole distributor of Korea MS for many years had their contracts cancelled with Korea MS.
“Not just us but there are few companies that are in a similar situation as us.” said a representative for this ex-partner. “We think that there will be more companies that will report to FTC as most of current Korea MS partners made similar contracts as us back in 2015.” Regarding this issue, a representative for Korea MS said that it is looking to see whether this issue is true.
Staff Reporter Kim, Jiseon | river@etnews.com