BUSINESS

Investigation against LNG bidding collusion to wrap up next month

By Julie Kim Jackson
  • Published : Jun 27, 2017 - 15:23
  • Updated : Jun 27, 2017 - 17:43
The Seoul Central District Prosecutor’s Office announced Tuesday it is speeding up its investigation into alleged large-scale collusion among Korea’s major construction companies, which are suspected of bid rigging a project to build liquefied natural gas storage tanks.

Last year 13 construction companies, including Hyundai E&C, Daewoo E&C and Daelim E&C, were slapped with 351.6 billion won ($309.2 million) in fines by the Fair Trade Commission after the governmental watchdog accused the builders of colluding to price-fix bids for LNG storage tanks ordered by the state-run Korea Gas Corporation. The fine marked the second largest penalty ever imposed on constructors by the commission.

The prosecution said that in the course of its investigation it has summoned related documents and materials from each of the construction companies as well as questioned former and current company executives. The office added that it is expecting to conclude its investigation by next month and plans to prosecute all involved parties.

(Hyundai E&C)
In February this year, Kogas filed a compensation suit for roughly 200 billion won against the 13 construction companies with the Daegu District Court.

The case, however, is not the only allegation of bid rigging against some of the country’s top construction firms.

Hyundai E&C, Hanjin Heavy Industries & Construction, Doosan Heavy Industries & Construction and KCC Engineering & Construction were hit with a combined 70.2 billion won fine by the FTC in April for price-fixing bids for a state railway project.

The FTC accused the four builders of manipulating their bids to help each other land specific sections in the project to build 58 kilometers of railroad tracks commissioned by the Korea Railway Network Authority in 2013.

Hyundai Engineering was penalized with the largest fine of 21.7 billion won, while Hanjin, Doosan and KCC were each ordered to pay fines of roughly 16.1 billion won.

By Julie Jackson  (juliejackson@heraldcorp.com)