Collusion in KEPCO Bidding for 17 Years... Fair Trade Commission Imposes 850 Million KRW Fine on 4 Companies

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Four companies, including Samsung Electric Industry and Ssangyong Electric, were found to have engaged in collusion worth hundreds of billions of won during the procurement bidding process issued by Korea Electric Power Corporation (KEPCO), resulting in sanctions from the Fair Trade Commission (FTC).

On the 22nd, the FTC announced that it imposed corrective orders and a provisional fine of 853 million won on the collusion activities of the four companies: Samjeong Electric Industry, Ssangyong Electric, Hanyang Electric Industry, and Hyeophwa Electric Industry.

According to the FTC, these four companies agreed to evenly distribute the quantities and pre-determine the winning bidders in a collusive manner for a total of 231 procurement bids for series reactors and discharge coils issued by KEPCO from February 2002 to February 2019.

KEPCO began issuing procurement bids for series reactors and discharge coils in the 1990s and has been purchasing KS-certified products to this day. At that time, the only companies certified by KS were these four, so only these four companies could participate in KEPCO's bids. The representatives of these four companies agreed to equally divide the winning quantities into quarters regardless of who won the bid.

Subsequently, the four companies executed their basic agreement in a total of 231 bids (101 for series reactors and 130 for discharge coils) issued by KEPCO between February 2002 and February 2019 by pre-agreeing in detail on the winning (expected) bidders and bidding price determination methods, taking turns winning the bids.

For each bid, the winning company allocated the quantities won equally as one-quarter shares to the other three companies and requested them to manufacture the finished products and supply them to itself. The winning company then consolidated the finished products received and supplied them to KEPCO, settling related payments and costs afterward.

The related sales amount confirmed to have been involved in this collusion is estimated at approximately 56 billion won.

The FTC stated, "This action is significant in that it uncovered collusion that had been secretly maintained over a long period in public sector procurement bidding."

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