Korea Gas Corporation Expands Claim to KRW 432 Billion in Damages
Closing Arguments on the 18th, Verdict Scheduled for December 8
GS Construction's LNG Plant Testbed Unit 1 at the Korea Gas Corporation Incheon Production Base in Dongchun-dong, Yeonsu-gu, Incheon.
[Asia Economy Reporter Cha Wanyong] Regarding the collusion in the construction of liquefied natural gas (LNG) storage tanks, the amount claimed for damages by the construction companies sued by Korea Gas Corporation has increased from 200 billion won to 432.9 billion won.
If the compensation amount proposed by Korea Gas Corporation is accepted in the final judgment scheduled for December, it is expected to place a significant burden on the construction industry, which is currently struggling due to the recent downturn in the construction market.
According to the Financial Supervisory Service's electronic disclosure system and the construction industry on the 22nd, on the 18th, Korea Gas Corporation expanded the scope of its claim in the damages lawsuit related to collusion in the construction of LNG storage tanks, increasing the original claim amount of 200 billion won to 432 billion won. The court (14th Civil Division) concluded the arguments and set the judgment date for December 8.
The construction companies sued in this case include a total of 13 firms: Gyeongnam Enterprise, DL E&C, Daewoo Engineering & Construction, Dong-A Construction Industry, Doosan Heavy Industries & Construction, Sambu Construction, Samsung C&T, SK E&C, GS Engineering & Construction, POSCO Engineering & Construction, Hanyang, Hanwha Construction, and Hyundai Engineering & Construction.
They participated in collusion by pre-determining the winning bidders in advance. The 13 construction companies decided the winning bidders for each project and pre-allocated the construction volumes among themselves in three rounds: 2005-2006 (1st round - 5 projects), 2007 (2nd round - 3 projects), and 2009 (3rd round - 4 projects).
Previously, the Korea Fair Trade Commission ordered a total fine of 351.6 billion won to 10 companies, excluding Gyeongnam Enterprise, Dong-A Construction Industry, and Sambu Construction, which were under corporate rehabilitation procedures, for violating Article 19 (Prohibition of Unfair Joint Acts). Among them, seven companies including Samsung C&T filed lawsuits arguing that some collusion acts were beyond the statute of limitations and that the fines were excessive, but they lost the cases.
Separately, in criminal proceedings initiated by prosecution, the Supreme Court sentenced Daelim Industrial, GS Engineering & Construction, and Hyundai Engineering & Construction to fines of 160 million won each, and Hanwha Construction to a fine of 90 million won.
The construction companies subject to the lawsuit argue that some of the collusion cases are beyond the statute of limitations and that the compensation amount proposed by Korea Gas Corporation is excessive.
A representative of one of the sued construction companies said, "Some collusion cases were already beyond the statute of limitations when the Fair Trade Commission imposed fines," and added, "We believe that the 351.6 billion won fine plus the 432 billion won civil lawsuit is excessive, and we are actively responding to the lawsuit according to legal procedures."
In fact, the construction companies have appointed major law firms such as Bae, Kim & Lee, Yulchon, Kwangjang, HwaWoo, Sejong, Barun, and Hyemyung as their legal representatives and are actively responding to the lawsuits.
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