KT Appeals Court Ruling to Pay 1.2 Billion Won for Collusive Bidding... Reviewing Appeal

KT Loses First Trial in Bid Rigging Case
Total Claim Amount 7.2 Billion Won... Possible Future Increase

KT is considering whether to appeal a court ruling that ordered it to pay 1.2 billion KRW in damages for collusive bidding in a national project after losing in the first trial.

According to industry sources on the 28th, KT stated in its recently released quarterly report, "On April 18th, we lost the first trial in a lawsuit filed by the Korea Institute of Science and Technology Information (KISTI) seeking damages, resulting in an obligation to pay approximately 1.2 billion KRW plus delayed interest," and added, "We are reviewing whether to appeal."

KT is accused of paying 3.6 billion KRW as a bribe to LG Uplus and SK Broadband to refrain from participating in the KISTI project bidding. In return, KT secured a sole contract worth 12 billion KRW. KT judged this as a gain since the contract amount was much larger than the bribe paid for non-participation.

KT, LG Uplus, SK Broadband, and Sejong Telecom are suspected of colluding to gain unfair profits during the participation process in dedicated public sector line projects ordered by nine institutions from 2015 to 2017 using such methods. Among the 12 collusive bids, KT won 8 contracts alone.

The Korea Fair Trade Commission judged KT's legal violations to be the most severe, imposing a fine of 5.7 billion KRW and filing criminal charges. LG Uplus was fined 3.895 billion KRW, SK Broadband 3.272 billion KRW, and Sejong Telecom 417 million KRW.

Since then, from 2020, demand institutions including KISTI, the Small and Medium Business Corporation, and the Korea Racing Authority have successively filed lawsuits against the telecom companies seeking damages. Since the unfair profits gained through telecom collusion are public funds, these institutions have shown a strong will to recover them. The lawsuit with the first trial ruling is the first from KISTI.

According to KT, as of last month, there are a total of nine lawsuits related to the company, with claims amounting to 7.25 billion KRW. KT stated, "The claim amount may expand depending on the progress of the lawsuits, including appraisals, in the future."