8 Korean cable makers fined for price-fixing
October 11, 2013 Leave a comment
2013-10-10 17:34
8 cable makers fined for price-fixing
By Kim Tae-jong
The nation’s anti-trust watchdog said Thursday it has imposed a combined fine of 6.2 billion won on eight major cable makers for price-fixing and decided to refer the case to the prosecution. The Fair Trade Commission (FTC) said eight cable manufacturers, including LS, LS Cable & System and Taihan Electric Wire, colluded to supply cables used in nuclear reactors at high prices.“Sales officials from those cable makers met before an official bidding for new reactors, and they chose bidders for different cables among themselves,” an FTC official said. “Later, they made an official bid at lower prices so that already-selected firms would be picked up as official suppliers, and that way, they could all get contracts at high prices for different products.”
The allegations over the irregularities were first made after the corruption scandal related to nuclear reactors was revealed in June.
Saehan Total Engineering Provider (Saehan TEP) was the official testing company for the main machine interface system that would be used in the reactor.
But the firm was found to have forged the test results of substandard cables, which were later used in building two nuclear reactors.
The Singori Reactor 1 and the Sinwolsung Reactor 2 were shut down as a result, and the investigation by prosecutors discovered that high profile figures were also involved in the scandal, including Lee Jong-chan, senior executive vice president of the state-run Korea Electric Power Corp., former Knowledge Economy Minister Choi Joong-kyung and vice minister Park Young-joon.
“Collusion can easily be attempted in the reactor cable market,” the FTC official said. “There are only a few qualified firms and they can easily know when cables will be needed.”
The amount of fines was decided based on how much each company gained unfairly through price fixing.
Taihan was slapped with the heaviest fine of some 13.8 billion won, followed by LS Cable & System with about 13.7 billion won, JS Cable with about 13.4 billion won and Seoul Cable with 919 million won.
Along with the heavy fines, FTC also made a request to prosecutors to investigate six of them for additional collusion charges.
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