SK Engineering & Construction is facing an investigation by the prosecution regarding its alleged price rigging in a huge local project.
The probe was launched into the builder as the nation’s antitrust watchdog was criticized for slapping it with only a fine earlier this month for the alleged malpractice.
According to the prosecution, Prosecutor General Kim Jin-tae requested the Fair Trade Commission to file a criminal complaint against SK E&C for its collusion in the Saemangeum reclamation project on Tuesday.
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| Co-CEOs of SK E&C Choi Gwang-cheol (left) and Cho Ki-haeng |
Under the country’s fair trade law, prosecutors have no rights to indict companies for breaching fair competition laws unless the FTC files charges. But the chief prosecutor can exercise the so-called “accusation request right” in which the FTC must file a criminal complaint if the top prosecutor makes a request.
“We will try to root out the collusive behaviors by exercising the accusation request right when it’s necessary,” a prosecution official said.
This is the first time for a prosecutor general to officially exercise the right since the related law came into effect in 2014.
On March 2, the antitrust watchdog fined 12 builders, including SK E&C, a combined 26 billion won for colluding in the bidding process for the reclamation project in Saemangeum, North Jeolla Province. The project was tendered by the state-run Korea Rural Community Corp. in 2009.
Of the 12 construction companies, SK E&C is suspected of playing a leading role in the illegal act by inducing other firms to participate in the massive bid. It also failed to cooperate in the FTC’s investigation, according to the prosecution.
“The prosecutors judged that the collusion case has a great ripple effect in the society as the total amount of construction cost won by the builders exceeds 100 billion won,” a prosecution official said.
Chronic price-fixing has long been detected in large-scale state businesses in the country.
Last year, the combined fines slapped on builders for collusion was 670 billion won, according to the FTC.
Some experts see the prosecution’s tough stance attributable to President Park Geun-hye’s pledge to eradicate corruption.
On Monday, the prosecution summoned officials of POSCO Engineering & Construction for questioning over its alleged role in the creation of a massive overseas slush fund.
By Park Han-na (hnpark@heraldcorp.com)
