Fair Trade Commission "Kolon Industries and 3 Other Companies Colluded in Sewer Pipe Bidding... Imposed Fines of 2.953 Billion KRW"

[Sejong=Asia Economy Reporter Joo Sang-don] The Fair Trade Commission has detected and decided to sanction four businesses, including Kolon Industries, for collusion in bids for the purchase of sewer pipes and manholes conducted by the Public Procurement Service and private construction companies from 2011 to 2016 through the Bid Collusion Sign Analysis System.

On the 8th, the Fair Trade Commission announced that it had identified four manufacturing businesses that colluded on the expected winning bidders and bid prices, deciding to impose corrective orders along with a total fine of 2.953 billion KRW.

According to the Fair Trade Commission, four manufacturers of sewer pipes and manholes?Kolon Industries, Korea Fibers, Korea Polytech, and Fine Tech Composite?agreed in advance on the expected winning bidders and bid prices for 268 public procurement bids conducted by the Public Procurement Service and 19 private bids conducted by private construction companies, and executed these agreements.

Initially, Korea Fibers developed and manufactured sewer pipes and manholes using glass fiber and other materials domestically. However, from the 2010s, competition intensified as new manufacturers producing the same items entered the market. Consequently, profits decreased due to price drops, leading Korea Fibers and Kolon Industries to initiate bid collusion from 2011 to avoid competition.

The four companies determined the winning bidders for upcoming bids expected every 2 to 3 months by considering each company's sales contribution and areas of interest, then agreed on bid prices and participated in the bids accordingly. For the 268 public procurement bids, Kolon Industries and Korea Fibers primarily decided the winning bidders, with Korea Polytech and Fine Tech Composite participating in the detailed bid price agreement process. For the 19 private bids, only Kolon Industries and Korea Fibers agreed on the winning bidders and bid prices before participating.

As a result of participating in the bids according to the agreements, the pre-determined winning bidders won all the bids and signed contracts.

Accordingly, the Fair Trade Commission imposed corrective orders on all four companies and levied fines totaling 2.953 billion KRW, including 1.43 billion KRW on Korea Fibers and 1.229 billion KRW on Kolon Industries.

A Fair Trade Commission official stated, "After actively utilizing the Bid Collusion Sign Analysis System operated by the Commission to detect signs of collusion in the public procurement bid market, we discovered collusion in the private bid market during the investigation and imposed sanctions collectively. We will continue to monitor the public procurement bid market through this system and respond promptly if signs of collusion are detected."

A Kolon Industries representative said, "The sewer pipe and manhole manufacturing business involved in the issue was already withdrawn about five years ago," adding, "We will comply with the Fair Trade Commission's sanction decision."

This content was produced with the assistance of AI translation services.