The Korea Herald


HHI in hot water over bribery scandal, labor dispute

By Korea Herald

Published : July 11, 2013 - 20:13

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Hyundai Heavy Industries, the world’s largest shipbuilder, is suffering from double trouble this week, with the nuclear power plant scandal on one side and an escalating labor dispute on the other.

The Busan prosecution on Thursday arrested three incumbent and former executives of HHI over bribery allegations related to nuclear facility corruption, adding to two others who had been arrested on the previous day.

The arrested employees allegedly delivered cash bribes to a manager-level official at the Korea Hydro & Nuclear Power Corporation, in exchange for KHNP accepting HHI-manufactured components, according to officials.

Authorities also seized and searched the company’s headquarters in Ulsan late on Wednesday, confiscating account books, computer files and transaction documents as evidence.

The Hyundai subsidiary recently rose as a new variable in the prolonged nuclear corruption investigation, after 600 million won ($534,000) in cash was found in the house of an arrested KHNP official. Most of the bank notes, according to prosecutors, were identified as being issued by HHI.

For the past several years, the heavy industry firm has supplied components such as pumps, transformers and emergency generators to local nuclear facilities.

Though it refrained from commenting on the issue, the company expressed concerns over the possible depreciation of its business credit and consequent losses in future orders.

“We do not expect any impact as heavy industries sales usually do not immediately reflect unfavorable factors,” said an official.

He refused to speak further on the issue, however, citing the ongoing prosecutorial probe.

From the inside, HHI is also faced with an unprecedented labor dispute which may possibly lead to the first walkout in 18 years.

In the wage negotiation session Tuesday, the management offered to raise the basic salary by 23,000 won but the union dismissed the suggestion, as it remained far below the required level.

“Because the shipbuilding industry is continuing to struggle, compromise on the wage will not be easy,” said an official.

“We have nevertheless solved our labor disputes through dialogue over the past 18 years and will make further efforts for communication.”

By Bae Hyun-jung (