 |
Photo courtesy of Yonhap News |
[Alpha Biz= Kim Jisun] Seoul Central District Prosecutors’ Office has referred eight companies and 11 current and former executives to court for collusion in bids issued by Korea Electric Power Corporation (KEPCO), involving an estimated KRW 677.6 billion.
The Antitrust Investigation Division (Chief Prosecutor Na Hee-seok) announced on January 20 that four executives from Hyosung Heavy Industries, HD Hyundai Electric, LS Electric, and Iljin Electric were arrested and formally charged with violations of the Monopoly Regulation and Fair Trade Act on January 9 (two individuals) and January 20 (two individuals).
In addition to these four leading companies, four small and medium-sized enterprises and seven executives were referred to court without detention.
The defendants are accused of prearranging winners and bid prices in 145 tenders for gas-insulated switchgear contracts issued by KEPCO from March 2015 to September 2022, thereby unfairly restricting competition. Prosecutors estimate that these collusive practices generated at least KRW 160 billion in illicit profits over seven and a half years. The resulting costs were passed on to consumers in the form of higher electricity production costs and increased electricity bills.
The four leading companies had been previously caught in similar collusive activities. Prosecutors noted that prior administrative fines against the corporations alone allowed prolonged and organized collusion. Until the investigation, the companies denied wrongdoing and contested Fair Trade Commission fines through administrative litigation.
Within three months of commencing the forced investigation, prosecutors confirmed additional collusion led by executives from the four companies, and exercised the right to request prosecution from the Korea Fair Trade Commission (KFTC) three times. Previously, the KFTC had filed complaints against the involved companies since January last year but excluded individual executives suspected of participating in the collusion.
Alphabiz Reporter Kim Jisun(stockmk2020@alphabiz.co.kr)
