'CSY' Supporting Family Companies in Advertising Agency Bids... Fair Trade Commission Issues Corrective Orders and Fines
[Sejong=Asia Economy Reporter Joo Sang-don] The Fair Trade Commission announced on the 10th that it has decided to impose corrective orders and a total fine of 136 million KRW on two companies, Yangjin Telecom and CSY Communication, for colluding on the winning bidder and bid price in the bidding for the selection of advertising agency operators inside stations and trains conducted by Daejeon Metropolitan City Urban Railway Corporation.
According to the Fair Trade Commission, Yangjin and CSY Communication agreed on the winning bidder and bid price in the bidding held by Daejeon City Urban Railway Corporation in May 2016 for the selection of advertising agency operators inside stations and trains, and executed the agreement. Ultimately, as initially agreed, CSY Communication participated in the bid and won the contract.
In this process, Mr. A, who effectively controls both Yangjin and CSY Communication, had Yangjin, a family company, participate in the bidding as a front to ensure that CSY Communication could win the contract, and decided the bid prices of the two companies. Mr. A holds the largest shares in both companies together with his family (Yangjin 59%, CSY Communication 100%), serves as a director, and makes business decisions, thus effectively controlling the companies.
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A Fair Trade Commission official stated, "Although legally they are separate business entities, it is significant that we have clarified once again that collusion in bidding among businesses that are in a controlling relationship or are effectively controlled and managed by one individual can be subject to sanctions under the Fair Trade Act." He added, "Even if they can be regarded as a single business entity in practice, if they participate together in bid rigging, they can be strictly punished for illegal collusion. We intend to prevent recurrence of similar violations by informing the public of this."
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