South Korea’s Fair Trade Commission (FTC) has fined seven local cable manufacturers a total of $14.7 million for bid rigging.
Per reports in The Pulse, The Korea Herald and the FTC, the companies—LS Cable & System Ltd., Taihan Electric Wire Co., Gaon Cable Co., Nexans Korea Ltd., Daewon Cable Co., Seoul Electric Wire Co. and Iljin Electric Co.—are accused of rigging bids for 37 tenders that were part of three separate contracts from Nov. 2011 to Oct. 2013. The bid winner would distribute the orders equally to the rest.
The FTC said in a statement that each company will be subjected to a fine of about US$2.5 million. It added that the case will be referred for prosecution. Korean courts have sentenced executives and employees that participated in the bid-rigging to imprisonment. In a 2014 case involving bid-rigging of cables used for nuclear power plants, three executives were sentenced to 6 months imprisonment. That action was noteworthy as it was the first time such a sentence had been imposed.
In the latest case, the reports cited a Fair Trade Commission’s statement as saying that collusive tendering is rampant in the local electrical cable market because only a few selective bidders are allowed to take part and order volume and timing is often flexible. The manufacturers worked together more than 30 times to set bidding prices for three separate cable supply contracts and shared the work among themselves over a two-year period between 2011 and 2013. Each company will be subjected to a fine of about 2.5 billion won, the statement added.
While admitting to the wrongdoing, the cable companies said that they had taken such measures in the past to relieve oversupply issues that stemmed from overcapacity in the production bases here. The companies have imposed penalties on the individuals involved in collusion and no longer engage in such practices, industry sources added..
Per reports in The Pulse, The Korea Herald and the FTC, the companies—LS Cable & System Ltd., Taihan Electric Wire Co., Gaon Cable Co., Nexans Korea Ltd., Daewon Cable Co., Seoul Electric Wire Co. and Iljin Electric Co.—are accused of rigging bids for 37 tenders that were part of three separate contracts from Nov. 2011 to Oct. 2013. The bid winner would distribute the orders equally to the rest.
The FTC said in a statement that each company will be subjected to a fine of about US$2.5 million. It added that the case will be referred for prosecution. Korean courts have sentenced executives and employees that participated in the bid-rigging to imprisonment. In a 2014 case involving bid-rigging of cables used for nuclear power plants, three executives were sentenced to 6 months imprisonment. That action was noteworthy as it was the first time such a sentence had been imposed.
In the latest case, the reports cited a Fair Trade Commission’s statement as saying that collusive tendering is rampant in the local electrical cable market because only a few selective bidders are allowed to take part and order volume and timing is often flexible. The manufacturers worked together more than 30 times to set bidding prices for three separate cable supply contracts and shared the work among themselves over a two-year period between 2011 and 2013. Each company will be subjected to a fine of about 2.5 billion won, the statement added.
While admitting to the wrongdoing, the cable companies said that they had taken such measures in the past to relieve oversupply issues that stemmed from overcapacity in the production bases here. The companies have imposed penalties on the individuals involved in collusion and no longer engage in such practices, industry sources added..
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