Warrants sought for construction firm executives over rigging scheme

Warrants have been sought for six incumbent and former executives of four local major builders on suspicions of colluding in the former Lee Myung-bak administration's highly controversial project to refurbish the country's four major rivers, prosecutors said Wednesday.

The four -- Hyundai Construction & Engineering Co., GS Engineering & Construction Co., SK Engineering & Construction Co. and Samsung C&T Corp. -- allegedly colluded to win bids for the first phase of the mega-budget project, which was to construct dams along the rivers, they said.

The 22.2 trillion won project (US$19.8 billion), pushed by the former Lee government, was completed last year amid mounting criticism over its economic viability and negative environmental impact.

The Seoul Central District Prosecutors' Office said the six, including the 61-year-old former executive director of Hyundai Engineering, only identified by his surname Sohn, allegedly orchestrated the rigging scheme in the turnkey construction contract, leading to an unfair competition.

A turnkey construction contract is a type of construction contract in which one successful bidder is responsible for the entire project from planning to actual construction. Such contracts, however, have sometimes been criticized for possibly creating leeway for collusion.

It marks the first time that prosecutors have sought an arrest warrant for an executive of the builders that participated in the river project since the launch of an investigation.

The probe comes after the Fair Trade Commission, the country's antitrust regulator, last year imposed a fine of 111.5 billion won on eight major industry players, including the aforementioned four.

A court hearing to decide whether to issue the warrants for the six is set for later this week, court officials said. (Yonhap news)