[Alpha Biz= Ellie Kim] The criminal trial of major South Korean power equipment makers, including Hyosung Heavy Industries, HD Hyundai Electric, LS Electric, and Iljin Electric, will continue on May 6 over allegations of collusion in gas-insulated switchgear (GIS) tenders issued by Korea Electric Power Corporation (KEPCO).

The Seoul Central District Court’s Criminal Division 32 is hearing the case involving eight corporations and their executives charged with violating the Monopoly Regulation and Fair Trade Act. Prosecutors allege the companies pre-arranged winning bidders and bid prices in 145 tenders between 2015 and 2022, effectively restricting competition.

GIS equipment is critical infrastructure used in power plants and substations to control excessive electrical currents. Prosecutors estimate the scale of the alleged collusion at KRW 6.8 trillion, with illicit gains of at least KRW 160 billion.

Regulatory Action and Ongoing Legal Battles

Previously, the Fair Trade Commission imposed corrective orders and fines totaling KRW 39.1 billion on 10 entities, including the major firms involved. Six companies were referred for criminal prosecution based on their level of participation.

Authorities argue that large and mid-sized firms coordinated bid sequences and pricing, while smaller companies participated through an industry cooperative, effectively dividing up contracts.

The FTC and prosecutors believe the scheme inflated KEPCO’s procurement costs, potentially contributing to higher electricity costs, though the exact consumer impact has not been quantified.

Disputed Charges and Broader Implications

The defendant companies have largely denied the allegations. Hyosung Heavy Industries argued that the charges lack specificity, while the other firms also rejected the claims. Iljin Electric is additionally challenging the admissibility of certain evidence, citing alleged violations of attorney-client privilege during search and seizure.

Major law firms have been retained for the defense, highlighting the significance of the case.

The criminal proceedings follow earlier regulatory sanctions and run alongside separate administrative lawsuits challenging FTC penalties, as well as civil damages claims filed by KEPCO.

Legal experts note that the outcome of the criminal trial—particularly rulings on evidence and the structure of the alleged collusion—could have far-reaching implications for related civil and administrative cases.

 

 

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