The Fair Trade Commission has imposed a penalty surcharge of 1.4 billion won on four wood pellet companies for colluding in a wood pellet purchase bid ordered by five power generation subsidiaries of the Korea Electric Power Corporation. The commission has also filed a complaint with the prosecution against an executive who led the collusion and closed three corporations after receiving the review report to avoid sanctions.
Wood pellets are eco-friendly biofuels made by grinding, drying, and compressing forestry by-products from forests or sawmills into sawdust form, and then injecting and molding them into a certain size. They are used for various purposes such as power generation and heating in cogeneration plants, industrial facilities, and public buildings.
According to the Fair Trade Commission, the four companies, Asia Energy Co., Ltd., PIO Korea Co., Ltd., Future Bio Co., Ltd., and JSF&B Co., Ltd., participated in a total of 42 wood pellet purchase bids ordered by five power generation subsidiaries of the Korea Electric Power Corporation between May 2016 and March 2022, agreeing in advance on bidding quantities and prices for each bid.
When a bid was announced, the indicted individual, who was both the Head of Team at Asia Energy and an executive of the closed corporations, jointly calculated the bidding price and quantity and agreed through phone calls and mobile messages (KakaoTalk). The companies placed bids according to the agreed terms.
The Fair Trade Commission imposed a penalty surcharge of 1.415 billion won on Asia Energy, as the corporation is still operating. For the other three corporations that have been closed, ensuring enforcement of corrective action or penalty surcharges is impossible. Taking this into consideration, the Fair Trade Commission decided to conclude the case for the three corporations, while deciding to file a complaint with the prosecution against the executive who led their closure.
A Fair Trade Commission official noted, "This is a case of detecting and sanctioning vendors involved in long-term bid collusion related to power generation companies' wood pellet purchases. It will serve as an opportunity to improve the chronic collusion practices within the bidding market. It is significant in that strict measures were taken against behaviors attempting to evade the commission's sanctions by closing corporations."