Seven Furniture Companies Fined
Current and Former Executives Receive Suspended Prison Sentences
Furniture companies and their current and former executives, who were indicted on charges of colluding in bids worth approximately 2.3 trillion won for built-in furniture in newly constructed apartments, were found guilty again in the appellate court. However, former Hanssem Chairman Choi Yangha was acquitted in the second trial, as he was in the first trial.
On May 15, the Criminal Division 5 of the Seoul High Court (Presiding Judge Kwon Soonhyung) delivered its appellate verdict for former Chairman Choi and seven furniture companies?Hanssem, Hanssem Nexus, Enex, Nexus, Uami, Sun&L Interior, and Reverse?as well as 10 current and former executives, who were tried on charges including violations of the Framework Act on the Construction Industry and the Fair Trade Act.
Hanssem and Enex were each fined 200 million won. Hanssem Nexus, Nexus, and Uami were each fined 150 million won. Sun&L Interior and Reverse were each fined 100 million won. Meanwhile, the 10 current and former executives of the furniture companies were each sentenced to prison terms ranging from 10 months to 1 year, suspended for 2 years.
The court stated, "This bid-rigging case undermined trust in the fairness of private tenders and infringed upon the right of construction companies, as the tender issuers, to freely select contractors. It also hindered the principles of a market economy that seeks to achieve social efficiency through fair and free competition, as well as creative corporate activity, consumer protection, and national economic development. Therefore, the severity of the offense is significant." The court further noted, "Bid-rigging in the special-order furniture market has become entrenched as a long-standing and widespread practice, making effective punishment unavoidable. Strict penalties corresponding to the authority and responsibility involved are inevitable."
Former Chairman Choi was acquitted again in the appellate trial. The court explained, "There is no evidence to confirm any statement to the effect that former Chairman Choi was informed of the bid-rigging." The court also noted, "While there are some expressions in Hanssem's monthly meeting materials or contract consent forms that could suggest collusion, there are also numerous circumstances indicating that it would have been difficult for former Chairman Choi to recognize the collusion. The prosecutor's claims of factual misinterpretation and misunderstanding of the law are without merit."
These furniture companies were accused of participating in bids for kitchen and general furniture construction at 783 new apartment sites ordered by 24 construction companies nationwide between January 2014 and December 2022, and of coordinating the winning bidders and bid prices. The scale of the collusive bids was found to be approximately 2.3 trillion won.
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