Prosecutors have brought to trial 11 current and former employees and corporations implicated in a KEPCO bid-rigging case worth about 677.6 billion won.
The Seoul Central District Prosecutors' Office's Fair Trade Investigation Department (Director General Na Hee-seok) said on the 20th that it indicted eight corporations and a total of 11 current and former employees on charges of violating the Fair Trade Act over suspected KEPCO bid rigging. The corporations facing the charges are LS ELECTRIC, Iljin Electric, Hyosung Heavy Industries and HD Hyundai Electric, among others.
According to prosecutors, from March 2015 to September 2022, they are accused of unlawfully restricting competition by colluding in advance on the successful bidder and bid prices in 145 tenders for gas-insulated switchgear placed by KEPCO.
Prosecutors said these companies, which hold about a 90% share of the gas-insulated switchgear market, agreed in advance on which company would win which orders, shared bid prices to win at high prices, and carried out collusive acts totaling 677.6 billion won, obtaining at least about 160 billion won in unjust gains.
Gas-insulated switchgear is equipment installed at power plants or substations to protect power facilities by quickly cutting off excessive current.
Prosecutors said, "Through a swift supplemental investigation, we identified corporations' chronic bid-rigging crimes." In this case, which followed an administrative probe by the Korea Fair Trade Commission (FTC), prosecutors conducted a supplemental investigation, taking over the case file and, through searches and seizures and interviews with those involved, identified not only working-level employees but also the crimes of senior executives who took part in the collusion.
According to prosecutors, these corporations unfairly profited for about seven years and six months by securing the highest possible award rate through collusion in KEPCO bids. In fact, the average award rate during the bid-rigging period reached about 96%. After the bid rigging ended, however, the average award rate fell to 67%. In other words, a difference of more than 30 percentage points emerged.
Prosecutors said, "The unreasonably high award rates of each company drove up the contract amounts, and this damage ultimately led to higher electricity rates due to an increase in KEPCO's electricity production expense, resulting in additional expenditure by the general public."
Prosecutors plan to cooperate with the Korea Fair Trade Commission (FTC) and KEPCO so that key evidence secured during the investigation can be used in administrative and civil lawsuits.