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Source: Hanssem |
[Alpha Biz= Kim Jisun] Prosecutors have indicted multiple furniture companies and their executives for engaging in collusive “sham bidding” practices and exchanging illicit payments in relation to large-scale apartment furnishing contracts worth over KRW 120 billion. South Korea’s largest furniture company, Hanssem, was not indicted after receiving leniency for self-reporting its involvement.
The Seoul Central District Prosecutors’ Office’s Fair Trade Investigation Division (Chief Prosecutor Kim Yong-sik) announced on July 27 that three corporations — Dongsungsa, Space Max, and Jarmart — along with three of their executives, were indicted without detention on July 4 for violations of the Framework Act on the Construction Industry and the Fair Trade Act.
In addition, on July 25, prosecutors indicted, without detention, three top decision-makers at Dongsungsa, Space Max, and another furniture supplier for additional sham bidding incidents, charging them with exchanging illicit payments during the bidding process.
Investigators found that between February 2012 and November 2022, Dongsungsa, Space Max, and Jarmart colluded in 105 bidding processes for system furniture contracts tendered by ten major construction companies. The total value of these contracts over the 10-year period reached approximately KRW 120.3 billion.
The Korea Fair Trade Commission uncovered evidence of collusion involving these companies — including Hanssem — and referred the case to prosecutors. Prosecutors, through search-and-seizure operations and interrogations, confirmed that CEOs Yoon (Dongsungsa), Yuk (Space Max), and Ryu (Jarmart) approved the collusion agreements.
Further investigation revealed that between April 2016 and September 2020, the companies engaged in collusion on two additional contracts, exchanging KRW 1.05 billion (≈ USD 800,000) through “sham bids.” The transactions were disguised as legitimate product sales. In these schemes, companies that submitted “dummy bids” were compensated with a portion of the project profits, and even requested changes in the designated winning bidder in exchange for further payments.
Prosecutors stated that Hanssem will not face indictment under the leniency program, which exempts the first company to voluntarily admit collusion and provide key evidence and testimony — whether before or after an investigation has begun — from prosecution.
Alphabiz Reporter Kim Jisun(stockmk2020@alphabiz.co.kr)
