Korea’s FTC fines canal colluders US$ 94 million
By Chris Sleight08 April 2014
South Korea’s competition authority, the Fair Trade Commission (FTC), has fined nine construction companies a total of KRW 99.1 billion (US$ 94 million) for price collusion and bid rigging on the country’s canal construction project.
The scandal has many parallels with the Four Rivers Restoration project, also a pet scheme of former President Lee Myung-bak, where many of the same chaebols (conglomerates) colluded on price. Prior to his 2008 – 2013 term in office,, Mr Lee was chairman and CEO of Hyundai Engineering & Construction (E&C) in the 1970s and 1980s, one of the companies named in both scandals.
Four companies will face fines in excess of KRW 10 billion (US$ 9.5 million) - Daewoo E&C, SK E&C, Daelim Industrial and Hyundai E&C, while lesser penalties are being imposed on Samsung C&T, Hyundai Amco, GS E&C, Hyundai Development, Dong-A Industrial, Dongbu and Halla E&C.
In addition, five unnamed senior executives from among these companies are expected to face penalties. They are said to have met in a restaurant in 2009 to discuss bids and the division of work on the project through collusion on bids.