Two employees of companies accused of colluding for a long period in bids for equipment ordered by Korea Electric Power Corporation (KEPCO) have been arrested.
On the 23rd, Lee Jeong-jae, the Seoul Central District Court's warrant-division Director General, issued arrest warrants for two current and former employees affiliated with LS ELECTRIC and ILJIN Electric, saying there was a risk they would destroy evidence. They were identified as having played a "general affairs" role that planned and coordinated the collusion by consolidation between large business groups and small and midsize business groups.
By contrast, the court rejected warrants for three other employees sought alongside them, citing reasons including that the allegations are disputable, the need to ensure their right to defend themselves, and a lack of flight risk.
Earlier, prosecutors sought arrest warrants for five employees of power equipment manufacturing and production firms including LS ELECTRIC and ILJIN Electric on charges of violating the Monopoly Regulation and Fair Trade Act. Prosecutors believe the companies agreed in advance to allocate quantities and then took turns winning bids in general competitive and region-restricted tenders worth 560 billion won that Korea Electric Power Corporation conducted from 2015 to 2022 to purchase gas-insulated switchgear.
Prosecutors concluded that the collusion drove up bid prices for gas-insulated switchgear and led to consumer harm, including higher electricity rates. Gas-insulated switchgear is installed at power plants and substations to quickly cut off excessive current and protect power facilities.
The investigation gained momentum when the Fair Trade Commission imposed a total penalty surcharge of 39.1 billion won along with a corrective order and referred six companies, including Hyosung Heavy Industries, to prosecutors. Prosecutors conducted searches and seizures of related firms in Oct. and have been investigating since.