Doosan E&C faces penalty for violating fair trade law

The Fair Trade Commission is expected to impose penalties on Doosan Engineering & Construction for violating the country’s fair subcontract transactions law, according to the firm’s regulatory filing Monday.

The construction unit of Doosan Group is set to face limits in operations and be fined hundreds of millions of won for a number of accusations, including a delay of payments to subcontractors and illegal verbal contracts. The fair trade watchdog, however, has yet to decide the amount of the fines.

As part of the punishments, Doosan E&C will also be banned from joining a bid for government-sponsored construction projects for about a year from August 12, the company said.

“Doosan’s case will be put on the table at the FTC meeting next month. We have finished with submitting a preliminary examination report and listening to Doosan’s explanations on the allegations,” an FTC official told local media.

Some market watchers said the FTC’s measure against Doosan E&C is a signal for the expansion of the government‘s investigation into unfair business practices by major builders.

Similar restrictions were put on mid-sized Sambu Construction and Hoban Construction. Hoban was fined 270 million won ($231,000) for taking unfair profits from subcontractors, while Sambu was fined 81 million won for a similar reason.

By Suk Gee-hyun (monicasuk@heraldcorp.com)