Prosecutors indict construction firms, officials over bid rigging

Published : Aug 9, 2017 - 13:32 Updated : Aug 9, 2017 - 13:32

Prosecutors said Wednesday they have indicted 10 construction firms and 20 officials for fixing a dozen biddings for mega public utility projects worth 3.5 trillion won ($2.83 billion).

The Seoul Central District Prosecutors' Office announced the result of a probe into the allegations that some 11 local builders colluded with one another to win state-funded contracts to build 12 liquefied natural gas storage facilities in three provinces from 2005 to 2012.

They face charges of violating the Fair Trade Act and Framework Act on the Construction Industry, according to the prosecution.

The file photo, provided by the Seoul Central District Prosecutors` Office on Aug. 9, 2017, shows an LNG storage facility in Samcheok, some 290 kilometers east of Seoul. (Yonhap)

Prosecutors indicted 10 of the 11 builders because one went under a merger and was not subject to the investigation, it said.

The officials have been charged without detention given the time lag between when the alleged crime was last committed and the start of the probe. Prosecutors also took into account that the companies have publicly vowed to keep their business protocols within legal boundaries following the scandal, the office added.

The probe was launched early this year after the country's anti-trust watchdog filed a complaint requesting an investigation into the suspicions.

The Fair Trade Commission accused the builders of picking the bid winner amongst themselves with a predetermined price and taking turns in winning orders.

It is viewed as another endemic corporate malpractice in South Korea's construction industry plotted by top firms in the industry including Samsung C&T Corp. and Hyundai Engineering & Construction Co.

The FTC has slapped them with 351.6 billion won in fines, the second-largest amount for such irregularities involving builders. In 2014, some construction firms were fined 435 billion won for fixing a bid for a high-speed railway project.

The state-run Korea Gas Corp., which initiated the contracts, has filed a 200 billion-won damage suit against the companies. (Yonhap)