Fair Trade Commission Issues Corrective Orders and Fines to Accounting Firms Winning Bids by Acting as Fronts
[Sejong=Asia Economy Reporter Joo Sang-don] The Korea Fair Trade Commission (KFTC) announced on the 22nd that it has decided to impose corrective orders and a total fine of 36 million KRW on six accounting firms, including Sinhwa Accounting Corporation, for colluding in seven accounting service procurement bids commissioned by the Ministry of Science and ICT. This is the first case of detecting and sanctioning collusion in the accounting service sector.
According to the KFTC, six accounting firms?Sinhwa Accounting Corporation, Samyoung Accounting Corporation, Jipyung Accounting Corporation, Daemyung Accounting Corporation, Gilin Accounting Corporation, and Daesung Samgyeong Accounting Corporation?agreed in advance on the expected winning bidders, cover companies, and bid prices in seven accounting service procurement bids commissioned by the Ministry of Science and ICT from 2013 to 2017, and executed these agreements.
The Ministry of Science and ICT has selected accounting firms annually through bidding to perform this work to verify the truthfulness of accounting data such as business reports submitted by telecommunications operators, and the six firms including Sinhwa colluded in this process.
The bids are conducted annually divided into three groups (KT group, SKT group, LGU+ group), and participants are not allowed to bid simultaneously in multiple groups. Accordingly, Sinhwa set up Samyoung, Jipyung set up Gilin, and Daemyung set up Jipyung and Daesung Samgyeong as cover companies to participate in the bids and were selected as winning bidders respectively.
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A KFTC official stated, "By utilizing systems such as the bid collusion sign analysis system, we plan to further strengthen monitoring of collusion occurring in the public service sector and continuously promote collusion prevention activities such as distributing materials to businesses."
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