Korea’s four major defense manufacturers have been fined for allegedly forming a cartel in a 2.7 trillion won ($2.41 billion) project to build next generation submarines, the country’s antitrust watchdog said Sunday.
The four defense contractors ― LIG Nex1, Samsung Thales, Hanwha Corp. and STX Engine Co.― were imposed with a combined fine of 5.99 billion won, according to the Fair Trade Commission.
Samsung Thales was fined 2.68 billion won with LIG Nex1 ordered to pay 2.47 billion won in penalties. Fines for STX Engine and Hanwha were set at 430 million won and 410 million won, respectively.
LIG Nex1, STX Engine and Hanwha reportedly divided four contracts under the submarine project among themselves by agreeing to an arrangement where each company will become the sole bidder in each smaller project, the FTC said.
The four contracts to build the new submarine’s sonar system were worth 313.7 billion won in total.
Samsung Thales was later told of the arrangement with an offer to become a sole bidder for a contract to build the submarine’s weapons system, according to the FTC.
“The commission imposed fines on the defense manufacturers as they have been found to have agreed to a prearranged bidding for five contracts in the Jang Bo-go III project,” it said.
(Yonhap News)
