US$ 95 million fine for Korean construction cartel
By Helen Wright07 June 2012
The South Korean Fair Trade Commission (FTC) has imposed penalties totalling KRW 111.5 billion (US$ 95 million) on eight contractors for bid rigging on government projects.
Eleven other construction companies were given verbal warnings for cartel activities but did not receive a financial penalty, FTC said.
The largest penalty was handed to Daelim Industrial (KRW 22.5 billion, US$ 19.3 million), followed by Hyundai Engineering & Construction (KRW 22 billion, US$ 19 million), GS Engineering & Construction (KRW 19.8 billion, US$ 17 million) and SK Engineering & Construction (KRW 17.8 billion, US$ 15 million).
The four other companies fined were Samsung Construction & Trade (KRW 10.4 billion, US$ 8.9 million), Daewoo Engineering & Construction (KRW 9.7 billion, US$ 8.3 million), Hyundai Development (KRW 5 billion, US$ 4.3 million) and POSCO Engineering & Construction (KRW 4.2 billion, US$ 3.6 million).
The penalties relate to contracts for the South Korean Government's US$ 17 billion Four Rivers Project - a wide-ranging scheme to rehabilitate portions of the nation's four largest rivers to provide better flood protection and create recreational areas for the public.
The contractors are said to have met at a hotel in the South Korean capital, Seoul, in April 2009 to pre-arrange bidding prices for Four Rivers contracts. FTC - which started an investigation into the case at the end of 2009 - claims bids for 14 contracts were agreed in advance.
The contractors are reported to have denied the FTC charges, and have the right to appeal the penalties.