The U.S. Securities and Exchange Commission has launched an investigation into allegations that several affiliates of Korea’s state-run Korea Electric Power Corporation were involved in graft, it was revealed on Thursday.
According to Rep. Hong Ihk-pyo of the opposition New Politics Alliance for Democracy, the American authorities sent a subpoena to the KEPCO last November asking to verify allegations that the U.S.-based Peabody Energy Corporation, CMW Partners and three others paid kickbacks to five KEPCO affiliates in exchange for soft coal supplement in 2009. The involved affiliates are Korea Westernpower, Korea East-West Power Co., Korea Southern Power Co., Korea South-East Power Co. and Korea Midland Power Co.
Hong revealed that the total price the Korean companies paid was $656 million, which is far higher than the normal price and the U.S. authorities are suspecting rebates were paid under the table.
Because KEPCO has its depositary receipts listed at the New York Stock Exchange, the SEC asked KEPCO to clarify the allegations. However, it has yet made any moves, Hong said. “All KEPCO did was monitor the cash flow,” he said.
KEPCO declined to comment about the ongoing investigation.
By Bae Ji-sook (email@example.com