All 7 Companies Guilty in 6-Trillion-Won Rebar Collusion... "Loss to National Treasury"

Seven steel manufacturers and 22 executives and employees who were indicted for colluding in bids worth 6 trillion won in Public Procurement Service tenders were found guilty in the first trial.

Seoul Central District Court. / Photo by Mun Ho-nam munonam@

On the 19th, the 24th Criminal Division of the Seoul Central District Court (Presiding Judge Choi Kyung-seo) sentenced former Sales Headquarters Directors Kim and Ham of Hyundai Steel, and former Long Steel Business Headquarters Director Choi of Dongkuk Steel, who were indicted for violating the Fair Trade Act, to prison terms of 8 to 10 months and fines ranging from 10 million to 20 million won each.

Nineteen others indicted on related charges were given suspended prison sentences or fines. Hyundai Steel Corporation was fined 200 million won, Dongkuk Steel was fined 150 million won, and Daehan Steel, Korea Steel, YK Steel (Yamato Korea Holdings), Hwanyeong Steel Industry, and Korea Steel were each fined 100 million won.

The court found most of the charges that Kim and others colluded to restrict competition by prearranging the winning quantities and bid prices in the annual unit price contract bids for rebar ordered by the Public Procurement Service from August 2012 to March 2018 to be guilty.

The court pointed out, "They submitted inflated data on private-use rebar prices to the Public Procurement Service to raise the expected winning bid price, which caused the winning bid price for government-use rebar to increase," adding, "As a result, the Public Procurement Service spent more on purchases, causing a loss to the national treasury." It also stated, "Collusion has long been established as a practice in the steel industry, and despite repeated administrative and criminal sanctions related to collusion in private-use rebar sales, the defendants did not stop colluding over government-use rebar."

The court particularly emphasized the responsibility of the executives involved in the collusion. It said, "The collusion was organized over a long period," and "In companies, employees carry out practical work under the instructions or approval of executives who have decision-making and work directive authority. Even if the staff carried out most of the specific actions, the responsibility of the executives who directed them is greater."

Previously, they were indicted for colluding to restrict competition by prearranging the winning quantities and bid prices in the annual unit price contract bids for rebar ordered by the Public Procurement Service from 2012 to 2018. During this process, they submitted false data inflating the price of private-use rebar to the Public Procurement Service to induce a higher base bid price, then pre-agreed and shared quantities and prices by company to gain unfair profits. It was found that the companies won government-use rebar bids without a single loss for seven years and earned higher profit margins than in the private market.

According to the prosecution, the scale of the collusion amounts to approximately 6.8442 trillion won, the largest in government procurement bidding history. The loss to the national treasury caused by the crime reached 673.2 billion won. After receiving a complaint from the Fair Trade Commission in August last year, the prosecution conducted a large-scale investigation, including raids on those involved.

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