 |
Photo: Prosecution Service |
[Alpha Biz= Kim Jisun] SEOUL, Oct. 15 — South Korean prosecutors have launched a large-scale investigation into major power equipment manufacturers suspected of colluding on Korea Electric Power Corporation (KEPCO) bids to gain unfair profits.
On Tuesday, the Fair Trade Investigation Division of the Seoul Central District Prosecutors’ Office, led by Chief Prosecutor Na Hee-seok, carried out search and seizure operations at the offices of Hyosung Heavy Industries, LS Electric, HD Hyundai Electric, Iljin Electric, and the Korea Heavy Electrical Equipment Cooperative — an association of medium- and small-sized companies. The raids were conducted on suspicion of violating the Fair Trade Act.
The companies are accused of colluding to raise bid prices and secure stable supply volumes during KEPCO’s “gas-insulated switchgear” tenders between 2015 and 2022. Investigators believe the firms agreed in advance to divide the contract volumes in competitive and regionally restricted bids worth approximately 560 billion won.
Prosecutors suspect that the collusion led to bid prices being set higher than market levels. In a normal competitive bidding process, KEPCO establishes a standard price and competition drives prices down. However, investigators say the collusion caused awarded prices to rise above competitive market rates.
The prosecution also believes that such collusive practices ultimately contributed to higher electricity equipment costs and financial harm to consumers.
Alphabiz Reporter Kim Jisun(stockmk2020@alphabiz.co.kr)
